Digitalisation of Wealth Management

Are wealth advisors still relevant in the digital age?

Sabrina Bailey

Global Head of Wealth Management, LSEG

As the role of technology has evolved in wealth management, a Refinitiv report unpacks the impact on the relationship between wealth advisors and their clients.

  1. Wealth advisors remain a valuable and reliable source of investment information across all generations of investors.
  2. Refinitiv’s latest wealth report uncovers key insights from over 1,500 investors around the world, highlighting the importance of ESG-related investment opportunities.
  3. Investors are willing to pay more for a personalised service driven by the right technology.

Are wealth advisors still relevant?

Against a backdrop of sweeping digitalisation and ongoing change within the wealth arena, the role of the wealth advisor remains relevant and adds tangible value to the wealth equation.

Our Refinitiv report reveals most investors – 58 percent of advisor-led investors and 62 percent of hybrid advisor and self-directed clients – say that advisor recommendations are their most reliable source of information, underscoring the continued value attached to human advice.

Even the more technologically savvy investors value advisor input.

Millennials, for example, attach a similar value to social media as a reliable source of investment advice as they do the human advisor (35 percent and 38 percent respectively).

38% of millennial investors value advisors as the most reliable source of investment advice

Another key area in which advisors can add value relates to environmental, social and governance (ESG) investments, which continue to grow in popularity across the globe. The real opportunity for advisors lies in closing the persistent ESG-related knowledge gaps.

Interestingly, advisor-led clients are less familiar with ESG factors – only 44 percent compared with 53 percent of self-directed investors – but importantly, those advisor-led clients that are aware have a greater propensity to consider ESG factors in future investments.

This points to a clear role for advisors in terms of shaping investor readiness for ESG-related activity. Advisors have a crucial role to play in delivering concrete data, research, and advice on how to proceed.

Read the report – Getting personal: How wealth firms can attract and retain the modern investor

Technology as an enabler

Not only do advisors still have a vital role to play in the digital age, but the technological changes sweeping the wealth industry are helping advisors achieve more, boost efficiency and optimise the services they offer.

A good example of the empowering role of technology can be found in the key area of personalisation, which is valued among all investor groups.

Our research reveals that two-thirds (64 percent) of millennials and 51 percent of investors between the ages of 35 and 54 are willing to pay more for personalised investing products and services.

64% of millennials and 51% of investors aged 35-54 are willing to pay more for personalised investing products and services

This means that the advisor must foster a personal relationship with each client, and this takes time. Our research reveals that 57 percent of respondents prefer to interact with their advisors by phone, closely followed by 49 percent who prefer in-person meetings.

This is where technology can empower advisors.

In the past, providing a personalised service limited the number of clients any human wealth advisor could work with, but leading-edge technology is boosting advisor efficiency, delivering easy-to-access data and insights, and streamlining communication.

This is allowing advisors to spend more time delivering a curated experience for their investors.

So important is the impact of technology that 34 percent of millennial investors and 35 percent of Gen X investors consider a wealth manager’s digital capabilities before choosing an advisor.

How do wealth advisors stay relevant?

Delivering the right information, at the right time, in the right place is crucial for advisors looking to stay relevant in an evolving industry.

Achieving these goals in turn requires a strong understanding of individual client needs, as well as the technology and tools to collate, analyse and deliver this information in the format that clients require.

Technology cannot replace the value that human advisors bring to client relationships. It can, however, improve and enhance those relationships.

An advisor's understanding of clients' emotional needs can't be replaced with technology.

A Mass-Afluent investor, US

These are the main findings of our report, and not only underscore the important point that wealth advisors remain highly relevant in the digital age, but also that they need the right technology to differentiate their services: it is an optimal combination of human intelligence and technological power that will ensure success in this dynamic space.

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