News & Analysis

Digital Collaboration is Key in Wealth Management

We expect COVID-19 to have a lasting behavioral impact that will accelerate the need for the digitalization of the financial advisor-client relationship. As a result, wealth managers must continue more than ever to pursue forward-looking strategic digital choices despite−and, in many ways, because of−the challenging environment of the COVID-19 crisis to weather the challenge and remain competitive.

Even before the crisis, digital transformation has driven a profound change in the wealth management industry. But, too often, wealth managers have adopted an attitude of a digital- first experience for all clients across all products and the entire service value chain without closely considering the most effective experiences and collaboration models for their client segments.

Part of the reason for this oversight is that Millennial and digital transformation have become nearly synonymous. Wealth managers want to meet Millennials’ presumed digital expectations to compete for the great wealth transfer expected over the next few decades. Therefore, many wealth managers embarked on a digital transformation journey, explicitly targeting the millennial client base−sometimes at the expense of a consistent experience for their current clients.

Now, COVID-19 is putting the past few decades of strategic digital choices to the test. For many wealth managers, the crisis has not only stressed business resiliency and revealed gaps in the operating model, but also shed light on clients’ holistic digital experiences. As most current interactions are confined to digital, financial advisors are suddenly challenged to deliver the same quality of service via those digital channels. This, in turn, stresses the demand for different digital collaboration models across client segments.

Our view has always been that digital transformation must allow wealth managers to compete for growing millennial wealth as well as deepen relationships with their existing client base.

Wealth managers need to pointedly invest in appropriate user- driven omni-channel experiences and use flexible and client- focused digital collaboration models to attract millennial wealth. Wealth as well as deepen relationships with their existing client base. Wealth managers need to pointedly invest in appropriate user- driven omni-channel experiences and use flexible and client- focused digital collaboration models to attract millennial wealth. As wealth managers begin to transition from crisis management, we are keen to share a few insights, developed through deep user research, on effective foundations for creating a sound and client-centric digital transformation strategy.

Wealth Managers Need To Invest In Digital Solutions That Support Flexible Digital Collaboration Models

Digital solutions are not only cutting-edge tools and capabilities from best-in-class vendors but holistic experiences across platforms that best replicate the traditional personal wealth management experience. We have identified four main themes to deliver an optimal digital wealth experience:

  1. Quick Access: Clients expect quick and seamless access to all their information without redundant sign-on or breaks in User-Interface (UI).
  2. Consistency in Experience: Omni-channel access is crucial, but the experience must be consistent across different entry points.
  3. Digital Collaboration: Different segments, even clients within the same segment, expect digital solutions to create different digital collaboration styles, across the wealth management value chain.
  4. Personal Services: Digital solutions and collaboration should not replace in-person access to advisors, but should look to augment the personalized experience for clients.

Quick Access and Consistency in Experience present common pain-points that clients have experienced as wealth managers continue to digitize their services. While digital options are often available to clients across different platforms and products, they often result in disparate experiences. For example, mobile UI is often vastly different from desktop UI, causing user confusion.

Wealth Managers Need To Invest In Digital Solutions That Support Flexible Digital Collaboration Models

In addition, clients are too often required to sign-on in multiple locations or switch platforms several times to view different products and accounts, creating undue burdens.

Digital Collaboration reveals the need for wealth managers to remain flexible around their client’s digital preferences. Clients often prefer a combination of different digital collaboration models, from in-person interactions enhanced by digital solutions to mobile, desktop, and online bi-directional interactions. 

Wealth Managers Are Investing In a Spectrum of Digital Experiences

Wealth managers have been investing in a full spectrum of collaboration models, ranging from digitally enhanced in-person experiences to online bi-directional interactions. Some notable recent examples include:

  • Wealth managers are modernizing their branches with digital capabilities, such as interactive displays. In addition, advisors often leverage mobile and tablet devices during in-person interactions to create real-time visualizations and sample plans to help clients understand complex concepts.
  • To more effectively provide high-touch experiences, some wealth managers are investing in digital capabilities that help simulate in-person experiences for clients, from the comfort of home. These programs leverage portable devices to help financial advisors more efficiently engage with their clients.
  • Secure texting capabilities, where clients can send secure text messages to a financial advisor, is becoming a more widespread capability to allow financial advisors to communicate with clients efficiently. 

(The article has been penned by Matthew Faraone – Managing Principal, Phil Kerkel- Managing Principal and Yola Yu – Principal Consultant, CAPCO- Global business and technology consultancy and the views expressed in this article are their own)

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Sohini Bagchi
Sohini Bagchi is Editor at Trivone Digital, a published author and a storyteller. She can be reached at sohini.bagchi@trivone.com