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How digitalization can drive personalization in wealth management

Digitization is changing wealth relationships, but clients’ willingness to share their data holds the key to ensuring that technology enhances personalization.

In brief

  • Digital tools are becoming more used and more valued, but clients expect them to lead to less personal wealth relationships.
  • Clients’ willingness to share more personal data will allow firms with the right capabilities to enhance digital engagement.
  • Wealth firms should prioritize improvements to hybrid models and the development of flexible, seamless interactions.

The COVID-19 pandemic has overturned the wealth industry’s previous certainties about client engagement. The pandemic has made digital contact indispensable — and increasingly popular. But long-term questions about what this means for client-provider relationships remain unanswered.

Practical questions over client preferences and the use of technology need to be balanced against less tangible topics such as branding, reputation and trust. The need to ensure that technology goes hand in hand with tailoring means that richer and deeper insights into client goals and beliefs will be essential to enhanced engagement.


Chapter 1

Why virtual doesn’t have to be impersonal

The growing use of digital tools will require wealth firms to think differently about how to engage with clients.

The COVID-19 pandemic has forced wealth clients to accelerate their use of digital technology and seems certain to lead to permanent changes in the behavior of firms and investors.

Globally, 51% of clients plan to make even greater use of digital tools in the future and the figures are higher among millennials (78%) as well as clients in Latin America (74%) and Asia-Pacific (64%). One in two wealth clients also plan to engage more with their advisor virtually moving forward. Age is a key differentiator here, with millennials twice as keen as baby boomers to receive advice virtually. Growing adoption is even making its mark on advisor-led wealth models. No fewer than 37% of clients who prefer advisor-led relationships plan to use more digital tools in the future.

On the upside, digital adoption is pushing up self-service, empowering client decision making and reducing cost-to-serve. But the shift to digital also can have fewer positive consequences if legacy technology prevents firms from delivering their full offering to clients. For example, it’s not uncommon for clients to find that private banks offer less digital interactivity than retail banks or brokers.

Perhaps more importantly, the growing use of digital tools is having a profound effect on how clients view their wealth relationships. More than one in three clients indicate that their wealth management relationship has become less personal, as a result of technology, and the figure is even higher among millennial clients and those who prefer digital-led or hybrid engagement models. Even the quarter of clients who prefer advisor-led contact described their relationships as less personal.


Chapter 2

Unlocking the power of data

Clients are open to sharing their data, which provides wealth firms an opportunity to deliver tailored experiences.

Clients are far more open to sharing their data than wealth firms realize, especially among younger generations. In fact, more clients are willing to share personal data with their primary wealth manager than with their doctor, provided they receive more relevant services and experiences in return. That places wealth managers in a far stronger position of trust than banks, insurers, retailers, technology firms and media platforms.

Many wealth clients are clearly ready to go on a data-driven journey with providers. But how far and how fast can this go?

It’s notable that, in addition to the 72% of clients willing to share their financial goals and ambitions, more than half are also happy to divulge their personal aims and objectives — information that’s key to delivering tailored services and engagement.

However, wealth firms could do more to extract value from the data they already have. Providers can harness the wave of data being released in the form of documents, downloads, logins, messages and meeting requests. A clear data and analytics strategy will help firms to gather and label this fast-growing data set, clean and structure it in a single “golden source” and interrogate and analyze it.

Leading providers can then use AI and machine learning to optimize the applicability and value of their client data. Firms seeking inspiration could look to their counterparts in technology and online retail, industries that thrive on customer data and are innovating at a staggering pace. The use of neuroeconomics can also help to develop richer client insights.

In the long term, clients will only be willing to share their data if they believe the process is creating value. That depends on more than just applying data insights in a relevant way.

Firms should also overtly demonstrate the links between sharing of certain data, identifying more tailored services, and the resulting positive outcomes.


Chapter 3

Taking hybrid models to the next level

Wealth firms should seek to create seamless digital experiences fully integrated with advisor-led channels.

As digital adoption surges, clients are benefiting from the investments made by wealth managers in recent years. A majority of clients not only think technology has made investing cheaper and more efficient (69%), but also that it has improved their investment decision making (57%).

Opinions are more divided on automated investment advice. Nearly half of clients believe robo-advice has benefits, but there is a marked generational split between millennials (66%) and boomers (24%). However, views of automated advice are largely unaffected by levels of wealth — in fact, clients with between US$5m and US$30m of assets are the most enthusiastic segment. Automation is clearly not a barrier to advising clients with complex portfolios.

Of course, belief in the value of digital tools does not mean that all clients want purely virtual relationships. Clients divide fairly evenly into those preferring advisor-led engagement (35%), those favoring a digital-led model (28%) and those seeking an equal mix of both (37%).

At first glance, these groups break down along predictable lines. Appetite for digital-led engagement declines from 37% of mass affluent clients to just 6% among the ultra-wealthy, and baby boomers are twice as likely as millennials to prefer advisor-led relationships. But there are unexpected insights, too. For example, one in four high net worth and one in five very high net worth clients see digital tools as their first choice for engagement.

Wealth providers can take valuable first steps towards providing flexible hybrid models that offer curated interactions by digitizing processes, aggregating data, and working with FinTechs to develop predictive analytics. The aim should be to create seamless digital experiences that are fully integrated with advisor-led channels. Underpinned by transparent data frameworks and enabled by technology, digital interactions should match the personalization of face-to-face contact. A deep understanding of client purpose and beliefs also can help firms to deliver more tailored, empathetic experiences and give clients a broader sense of fulfillment.


The growing use of digital tools is changing how clients view their providers. Many expect their wealth relationships to become less personal (e.g., less face to face) in the future. But clients are also far more open to sharing their data than wealth firms realize, especially among younger generations, in exchange for tailored experiences. Wealth firms have an opportunity to create seamless digital experiences, fully integrated with advisor-led channels.

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