Sarlota Hohwald
In this second insight in our two-part series, we delve into the importance of leveraging a carefully curated mix of data and analytics, digital capabilities and personalised offerings to succeed in this fast-paced environment.
- Accelerating digital transformation continues to shape the wealth industry, but while a digital-first approach offers speed, efficiency and 24/7 connectivity, the personal touch remains vital.
- Our research supports the view that digital capabilities and advisor advice both have value in the wealth space, suggesting that hybrid models will gain traction in future.
- This insight examines how the efficient use of technology can empower advisors and investors alike by delivering broad and deep data and personalised insights.
Unpacking an evolving wealth space
As outlined in the first insight in this two-part series, ongoing developments in technology are increasingly game-changing, with AI poised to reshape the investment landscape. The wealth space continues to undergo a period of profound and accelerating digital transformation, in which wealth firms and advisors must ensure that they successfully meet the changing needs of a new breed of tech-savvy investor. At the same time, digital capabilities must be balanced by personalised offerings that cater to a growing demand for customised solutions.
Alongside the pivotal role of AI, LSEG’s latest research[1] on changing preferences and emerging trends in the industry has revealed some key themes that are shaping the wealth space today:
Personalisation remains key
Personalised data is a key element required since both investors and advisors value personal recommendations that reflect their individual circumstances and preferences. Data, analytics, content and expertise must be tailored and customised to deliver solutions that speak to individual needs.
Hybrid investment models are likely going forward
Our research supports the view that digital capabilities and advisor advice both have value in the wealth space, suggesting that hybrid models will gain traction in future. A hybrid investment model encompasses both digital and advisor elements and this, in turn, means that providers will need to strike the right balance – and offer an optimal mix of data, technology and human expertise. A delicate balancing act between leveraging next-level tech to enable streamlined, digital support, and adding personalised touch points will be key to long-term success.
Trust is crucial
A third key theme to emerge is that of trust. This thread of trust needs to start with trust in data and technology and run through to trust in advisor/client relationships. When asked about the greatest potential value an advisor can add in the next 3 years, 51% of respondents who don’t currently use an advisor and 45% of those who do use an advisor selected “to provide investment advice that I trust".
Curating the right mix
Keeping these themes in mind, wealth industry players need to leverage a carefully curated mix of data and analytics, digital capabilities and personalised offerings to succeed in this fast-paced environment.
This is true for advisors and those catering to self-directed investors, including:
- Self-advised platforms, which equip investors – from emerging to experienced – to manage their own portfolios. These platforms support investors by delivering functionality that allows them to buy and sell a wide variety of investments online, as well as access tools, research, market data and more.
- Robo-advisors, which are online wealth management services that leverage advanced portfolio management algorithms to offer automated investment advice. Robo-advisors provide a cost-effective option for investors wanting a self-directed experience supported by trusted digitally-generated advice.
- Online brokers, offering advisory services and leveraging digital engagement to deliver value added services such as market data, research and collaboration tools.
Data is the foundation of any successful investment decision. Without access to accurate, comprehensive and trusted data, neither advisors nor investors can optimise financial wellness. To extract true value from data, however, wealth industry participants need to be able to pinpoint relevant information. This is where value-added analytics are crucial.
A leading digital experience should leverage a range of different capabilities – from video calls and chat features to interactive apps and social media engagement. Omni-channel connectivity, especially across mobile devices, remains vital, since digitally native retail investors are increasingly using mobile apps to access their account information:
- 42% of investors – rising to 63% for Generation Z – identify digital apps, channels, tools, and platforms as one of the most important factors when selecting investment providers.
Balancing these capabilities with a personalised approach is particularly important. Industry players can truly differentiate their offerings by engaging with investors through personalised and consumed content that brings data to life and delivers simplified insights tailored to individual investor needs.
The vital role of customisation
The personalised touch remains essential. Ongoing digitalisation does not undermine the value that advisors bring to the investment table, and hybrid investment models will continue to gain traction. The efficient use of technology can empower advisors and investors alike by delivering broad and deep data and personalised insights.
At LSEG we support both advisors and self-directed investors by offering a combination of unparalleled data, targeted insights and engaged digital-first capabilities. For example, our data visualisation solutions offer investors actionable investment insights through engaging short videos that provide a personalised experience for each investor.
Our commitment to ongoing innovation means that we will continue to meet the challenges of an evolving wealth industry and deliver the right mix of data, digital solutions and human expertise to help industry stakeholders optimise their success in this dynamic and competitive industry.
[1] Conducted by ThoughtLab, this 2023 research included global surveys of investors and investment providers and was based on a survey of 2,000 investors across countries, wealth levels, ages, lifestyles, occupations, gender, and other characteristics.
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