Four key findings from the research – and how wealth managers should respond
1. Clients are more willing to switch provider
One-third of clients plan to switch wealth management provider over the next three years. The most profitable clients are the least loyal; they are the segment most likely to switch provider, particularly when they encounter major life events. Our analysis shows that independent financial advisors and FinTechs are the likely winners from this switching, and will gain market share. Firms need to act now to retain existing clients and attract new ones; effective strategies are likely to focus on high-growth opportunities, particularly in Asia and in the mass affluent client segment.
2. Investors demand high-value solutions
A successful wealth management offering is more than a shop window for products and services. The future of wealth management will focus on outcome-based solutions that provide easier, faster and more personalized ways of matching products and services with real-time client demands. Many clients want advice in planning, but are holding back from seeking it. This means providers must strike a balance between, on the one hand, individualized products and services, and, on the other, simple and straightforward solutions. Major life transitions present an opportunity for wealth managers to improve their understanding of investor needs, deepen relationships, and engage clients in planning and education.
3. Digital and voice-enabled technology are the channels of the future
Clients are turning to these channels not just for basic transactional activities but to manage wealth and receive financial advice. At the same time, first-generation digital technologies are getting pushed aside. Despite this trend, many clients do not want to lose the personal touch entirely. Firms must focus on creating an omni-channel, ‘digital plus human’ client experience to deliver education, advice and administration anytime, anywhere, anyway. Technology can also be harnessed to improve advisor efficiency and regulatory compliance.
4. Pricing models need an urgent rethink
Nearly half of wealth management clients do not trust that they are being charged fairly. They struggle to understand how much they pay, and are concerned about hidden costs. Because of this, many are searching for simplified price structures. To tackle this issue, wealth managers must recalibrate their pricing models, offer greater transparency and do a better job of communicating their value to clients.