In recent years a number of wealth management firms have invested in boosting their digital offerings. Yet data gathered by GlobalData suggests some companies are in danger of over-digitalizing their processes.
During the Digital Integration in Wealth Management 2019 conference, one concern mentioned throughout was whether the wealth industry is digitalizing processes for digitalization’s sake.
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Tesla was used as an example of the risks of this approach. It has been claimed the car manufacturer became over-reliant on automation during the manufacturing process, which resulted in delays during the building of its Model 3 vehicle. Similarly, if wealth managers rely too much on technology they could lose the human aspect of their proposition, causing their client base to shrink.
As per GlobalData’s 2018 Mass Affluent Investor Survey, having access to a human advisor or consultant is seen as important to 66.7% of mass affluent investors. This shows the importance of the human aspect of wealth management services. If client-facing processes become over-digitalized it could alienate this large population of investors.
However, meeting clients face to face is time consuming and generally costly. The use of technology can undoubtedly aid the process, and using digital tools will help wealth managers deal with their clients more efficiently. This could be achieved by introducing other methods and channels for advisors to communicate digitally with their clients.
In order to attract and retain the lucrative mass affluent segment, a hybrid approach combining digital tools with face-to-face contact is the best possible way of managing investments.
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