For years, many in the wealth management industry have questioned whether they need to tap into digital to be successful in the industry. Today, there is no question, digital is critical in advisory services—this according to our recent Voice of the Advisor Study. We interviewed more than 650 advisors in the United States and Canada to take the pulse of the industry, and over the next few weeks, I’ll share some of the initial findings. This week, I’ll delve into the importance of digital.

Digital is essential to advice

If firms and older advisors are on the fence about whether or not to use digital, newer advisors—and their clients—aren’t. Consider this: more than three-quarters (77 percent) of advisors we surveyed say client demand for digital is increasing, and 75 percent believe the trend will be stronger in the next five years.

The digital advisor is becoming a reality

When it comes to social media, 64 percent of advisors surveyed agree that social media platforms are a significant and acceptable means of client interaction, and 62 percent use it with their clients. Where we see the biggest divide is when we start to break the numbers down by advisors’ years of experience. More than 80 percent of new advisors (those with fewer than 10 years of experience) connect with investors through Facebook. Some 78 percent of experienced advisors (those with over 10 years of experience), however, turn to LinkedIn to connect with investors. What these findings illustrate is that across the board, younger advisors are using more online chat, web-conferencing and social network channels with clients for account planning and review, as well as informal client inquiries.

Greatest demand is for advanced digital tools

More than half of the advisors we surveyed (56 percent) say financial planning tools, including portfolio monitoring, are most in demand by their clients. Following closely behind, 42 percent of advisors say portfolio management tools, including asset allocation and a 360-degree view of accounts, are desired. These findings match our Generation D research, where advisors consider the same tools to be difference-makers by investors when selecting an advisor—and it’s not only investors that consider these tools to be important. Our research finds that advisors with the highest assets under management are disproportionately in need of financial planning tools.

The debate is over: digital is unquestionably suitable for wealth management—both investors and advisors are in need of more of it, and increasingly it’s the younger advisors who firms need to listen to when it comes to digital. Join me next week when I’ll explore this topic further.

3 responses:

  1. Kendra – thanks for sharing these great insights on the future of advisor/client relationships. We find many of our financial clients are finding greater engagement and more conversations through the use of video. Digital encompasses so many different things. Based on your research, do you find video to be an essential component of the digital experience? Thanks.

    1. Video is a great example of how we can bring advisors and their personal relationships into the digital experience. Most firms see video as a key component of the client experience and a way to provide flexibility and leverage to advisors and experts. Our research shows that while clients want digital, it is not at the expense of wanting a relationship or valuing advice, which plays well to incorporating video in to the offering.

  2. Thanks for your article about asset management. The world seems to keep getting more and more complicated, and it’s important to keep your assets protected and healthy. It’s interesting how the digital world has started to make a big play in the asset management system. I’ll be sure to keep this information in mind when I talk to my asset manager.

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