Avaloq, an innovator in digital banking solutions and wealth management technology, has revealed that a quarter (25%) of investors worldwide would think about moving from wealth managers who don’t modernise and adopt new technologies.
The results of the recent study, which involved 300 wealth managers and over 3000 investors in Europe, Asia, and the Middle East, indicate that wealth management experts are either unable or reluctant to employ investment advisory tools with their clients.
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Wealth managers and technology
According to Avaloq, a client’s willingness to adopt technology was found to be a significant factor in their wealth manager’s trust, with 63% of investors citing the importance of being shown in-person how their investment decisions are impacting their portfolio and two thirds of investors (66%) reporting that having access to investment analytics and portfolio visualisation was essential to developing a sense of confidence with their adviser.
Nevertheless, Avaloq discovered that wealth managers had low faith in their technological systems, with 44% of respondents calling them outdated and 31% saying they aren’t appropriate for their purposes.
Due to this discontent, 37% of wealth managers worldwide still do not use investment advising technology in immediate client meetings, which makes it difficult for them to meet the standards set by their clients.
The main causes are that the systems are too complicated for clients (65%) and the user interface is not designed for client presentations (78%). Other obstacles include the inability to conceal sensitive information (40%) and the difficulty of navigating complex systems (39%).
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By GlobalDataWhen focusing solely on the United Kingdom, the discrepancy between investors and their counsellors has become even more apparent.
If it comes to creating trust in their wealth manager, investors in the United Kingdom rely more on technology.
72% of UK investors value the ability to see investment data and portfolio visualisation, as well as being presented the impact of their investment decisions on their portfolio in real time during meetings.
However, half of UK wealth managers (50%) do not use investment advising technology with customers, owing to poor design (78%) and applications that are too complex to understand (61%).
Wealth managers in the UK have identified a lack of connection between their various platforms as a major digital pain point.
In line with Avaloq’s research, although 58% of wealth management professionals worldwide sense their systems are not adequately integrated, only 63% of UK wealth management professionals feel their data is cohesive across all the platforms they use.
The inability to integrate may lead to more manual processing, which would make it more difficult for financial managers to expand their individualised services.
Suman Rao, UK managing director at Avaloq stated: “Our research reveals that while wealth managers are under increasing pressure from clients to incorporate technology into their offering, many are struggling to keep up due to complex, outdated and poorly integrated technology systems.
“Despite this, their reliance on technology is growing by the day and demand from clients is only going to increase. If wealth managers want to remain competitive and ensure they are delivering top client service, they must have a well-functioning technology ecosystem.
“That said, the responsibility is not all on the wealth manager, technology providers must also step up to ensure they are delivering the analytics, automation and visualisation needed by both wealth managers and their clients.”
