The digital doomsday warnings keep on coming.
The second major global wealth report in two weeks is stressing the "pressing" need for wealth management firms to update their digital capabilities or face steep declines in clients and profits.
Nearly two-thirds of clients with at least $1 million or more in investable assets expect to manage most or all of their wealth relationship digitally in five years, according to the annual World Wealth Report released by Capgemini and RBC Wealth Management, and would consider leaving their current firm if an "integrated channel experience" is not provided.
The Capgemini report follows the Boston Consulting Group's annual global wealth study, which warned that wealth managers were facing a digital "inflection point."
NO AGE BOUNDARIES
While demand for digital services is highest among wealthy clients under 40, older clients are also demanding digital, the Capgemini report found.
"Demands for digital capabilities know no boundaries when it comes to age, wealth, or geography," Jean Lassignardie, chief sales and marketing officer for Capgemini Global Financial Services said in a statement. "Clients want their touch points with wealth management firms to be seamless and fully integrated every time."
Too many wealth management firms are "playing catch up to get the level of digital sophistication that clients expect," David Wilson, head of Capgemini Financial Services Strategic Analysis Group, said in an interview.
Wealthy clients tend to be "demanding individuals," Wilson said, "who are not going to tolerate lower levels of sophistication than what they can get from their retail bank, Amazon, Google and Facebook."
Wealth managers should focus on providing clients with the ability to access information on more than one digital platform, Wilson said, and meet the demand for state-of-the-art digital information and transactional services.
Firms that don't meet the swelling digital demand face a "ticking time bomb," Wilson said, especially when it comes to the next generation. Wealth managers who don't provide mobile, video and social media platforms face "huge attrition risks" when older clients transfer their wealth to the next generation, he cautioned.
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