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Why wealth apps get poor marks for client satisfaction

When it comes to client satisfaction, wealth management mobile apps are getting industry’s lowest grades.

Full-service wealth apps ranked last in a J.D. Power survey of 10 trades including airlines, hotels and health insurance. Even other heavily regulated sectors scored much higher: Banking and credit card mobile apps actually topped the list. Credit card companies scored 28 points higher than wealth management firms in overall performance and 31 points higher in appearance, according to the survey of almost 2,500 respondents that used the apps within the last 12 months.

“There are a number of different factors that have contributed,” says Michael Foy, senior director of wealth management at J.D. Power. “First, the industry has been largely dependent on the financial advisor to manage the customer experience. Firms just haven't invested as much in the digital experience.”

Wealth app users said many advisory mobile platforms have a dated look and feel, which inhibited usage and hindered the overall experience, according to the survey. The dismal ratings may help explain low adoption levels. Only 27% of respondents managed investments on mobile apps, while 63% used apps for retail banking functions, according to the survey.

So why do wealth apps lag so far behind?

The software may be more complicated to build. For example, data from different account types and providers makes aggregating the information complicated. The apps also have to be able to support complex functionality from transferring funds to communicating with advisors, Foy says. “It becomes very challenging from a user-experience standpoint to do that in an effective way on a very small screen,” he adds.

Also, wealth management clients tend to be older. Many may prefer a human touch and be slow to switch to a mobile experience. It hasn’t been long since “the wealth management firms were still asking the question, ‘Is mobile really that important to our clients?’ ” Foy says.

But Joel Bruckenstein, founder of the advisor technology conference T3, is skeptical that slow mobile adoption is solely due to age. Mobile “is probably less important to older clients as a group, but again, a portion of that cohort is tech savvy and uses their mobile devices all day long,” he says.

Matt Reiner, a partner at Capital Investment Advisors, says his baby boomer clients use smartphones to check Facebook, order from Amazon and call for an Uber or Lyft. “They may not express the need for you to have a mobile preference, but they will,” Reiner says. “We will be playing catch up later as our clients continue to demand more accessibility provided via a digital experience.”

Mobile apps are listed as the top tool that will transform wealth management in Financial Planning’s 2019 Tech Survey. Indeed, 40% of advisors surveyed said they anticipate mobile apps to be a game changer; 39% said the same about behavioral finance software.

Below are some of the leading robo advisors in the industry listed by number of clients and assets under management, according to an Aite Group study in May. Also included are the average client ratings of their apps, based on those posted by thousands of users on Android’s Play Store.

Noah Kerner
Clients: 2,058,343

AUM: $1.15 billion

Android rating: 4.4 stars

CEO: Noah Kerner
Betterment CEO Jon Stein IAG
Clients: 361,420

AUM: $13.59 billion

Android rating: 4.3 stars

CEO: Jon Stein
Clients: 29,932

AUM: $5.43 billion

Android rating: 3.9 stars

CEO: Karl Roessner
Personal Capital
Clients: 18,308

AUM: $7.91 billion

Android rating: 4.6 stars

CEO: Jay Shah
Schwab Intelligent Portfolio
Clients: 279,000

AUM: $33.4 billion

Android rating: 3.5 stars

CEO: Walter Bettinger
Mike Sha, co-founder and CEO of SigFig, says banks mistakenly position robos as an "island" separate from other wealth management offerings.
Clients: 5,977

AUM: $31 million

Android rating: 4.4 stars

CEO: Mike Sha
Clients: 2,365,529

AUM: $45 million

Android rating: 4.3 stars

CEO: Brandon Krieg
Vanguard is cutting commissions for 15 mutual fund shares.
Clients: 526,069

AUM: $106.78 billion

Android rating: 3.8 stars

CEO: Tim Buckley
Wealthfront CEO Andy Rachleff revealed how his firm plans to evolve at CB Insights' Future of Fintech conference in New York City.
Clients: 221,089

AUM: $11.4 billion

Android rating: 4.7 stars

Wealthfront: Andy Rachleff
Clients: 31,772

AUM: $15 million

Android rating: 4.1 stars

CEO: Herbert Moore