High-net-worth investors are often overlooked when it comes to digital advice.
The conversation surrounding the digital wealth management space has focused on appealing to millennials ahead of the anticipated $30 trillion wealth transfer. But as the digital revolution reshapes the advice industry, the expectations of nearly every demographic have changed. That includes older, high-net-worth clients.
Approximately 64.2% of high-net-worth individuals around the world expect their future wealth management relationship to be largely or completely digital, according to CapGemini data from 2014. According to the same survey, 47.6% of investors age 60 and older also anticipate their wealth management relationships will contain a digital component.
In just two years, these expectations have spread. The demand for digital tools in the client-adviser relationship has expanded to investors of all ages and wealth bands. Capgemini found that “approximately 65% of all [high-net-worth investors] say sophisticated digital channels are highly important” in its 2016 World Wealth Report.
On the adviser side of the equation, the benefits of technology to the bottom line are plentiful. When compared to their peers, advisers leveraging technology to its fullest potential have nearly 40% more in AUM, have a higher percentage of millionaire clients in their base, and serve 55% more clients, according to a 2015 Fidelity white paper.
Not only do wealthy clients expect their advisers to serve them digitally, they are actually more inclined to leave their current adviser if their experience is not supplemented with efficient and convenient technology.
Another Capgemini report found that 66% of individuals with between $1 million and $5 million in assets would leave their wealth manager if they experienced a lack of integration between digital and traditional channels. In the most extreme scenario, firms and wealth managers could lose an estimated 56% of their net income should they not upgrade their technological capabilities.
Clearly, there is a need for advisers to supplement their service offerings to high-net-worth individuals with digital tools. If you are still not convinced, here are several additional reasons why bulking up your technological arsenal can help attract and retain high-net-worth clientele:
Technology increases adviser efficiency.
The number of advisers is not on the rise — but the volume of investors seeking financial advice is. Therefore, advisers need to be more efficient to onboard more clients. Opening an online portal allows high-net-worth clients to input information or life changes without adviser intervention. The adviser can then go in and see this updated information on an organized, visually-pleasing interface without having to do any data entry themselves. Additionally, working efficiently is going to become even more important when the Labor Department’s fiduciary rule comes into play.
Add convenience and collaboration to the high-net-worth client-adviser relationship.
Investors want online access to their financial plan. Offering a client portal allows the investor to log in and see any changes an adviser makes anytime, anywhere, and on any device. Constant access to planning information enables consistent client-adviser collaboration throughout a financial plan's progression. These digital tools allow the investor to directly see how they are tracking against their major goals — something that is is very attractive to high-net-worth clients with multifaceted financial portfolios and millions of dollars in assets.
Complement your financial planning with technological capabilities.
Do not forget, the value of an adviser shines through the planning aspect of the services offered. Yes, more and more older clients seek technology. However, no piece of technology can fully replace the nuance and subjectivity a human adviser can add to the relationship, especially in the eyes of clients with complex financial situations.
Show your added value over robo advisers.
Human advisers using technology provide a much more subjective client experience than a robo adviser can. That is not to say that robos do not have a place in the market or fail to provide value. That said, advisers who embrace the digital tools available in the market today provide their clients not only the technology they're demanding, but also human emotion and understanding that can help take the client experience to the next level.
Many people watching the financial technology revolution assume there is a war waging between human advisers and robos. However, when it comes to high-net-worth investors, the real opportunity lies in harmoniously using technology and human intervention, while keeping financial planning at the core of the culture and operations of the firm.
Despite the proliferation of technology products and capabilities, financial planning must remain at the core of an adviser’s relationship with these clients.
Your high-net-worth clients will leave if you ignore their cries for technological support. Ensure you take the time to carefully research your digital options, keeping in mind what is most important to your clients when selecting tools to implement their financial planning experience.
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