Loyalty among wealth management clients is on the wane amidst presence of new players, with clients now having relationships with five different types of providers on average.
The findings are from a report by EY, which surveyed 2,000 wealth management clients across 26 countries and 50 industry executives.
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Of the clients polled, 33% said they switched providers in the last three years while another third said they intend to make a similar move in the coming three years.
On the other hand, the study found clients’ preference for digital channels rising significantly.
The EY 2019 Global Wealth Research report found 41% of the respondents favouring mobile apps as their primary wealth management channel.
This is far above the 2016 forecast, when just 20% of clients anticipated that they would use wealth apps by 2019.
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By GlobalDataHowever, respondents still demand human interaction, with 42% desiring the method for getting financial advice.
Moreover, 25% of the respondents said that they desire face-to-face interactions or phone calls as their primary engagement method.
The study also revealed unhappiness among clients over the fees being charged.
Forty six percent of the clients said they do not trust they are being fairly charged.
This attitude was more pronounced in UHNW clients, with 66% dissatisfied with the fees.
Also, 55% of the clients demand a payment method that is more transparent, objective and certain.
The use of independent advisers is anticipated to increase 18% over the next three years, indicating clients’ fondness for flexible solutions and fees.
At the same time, the number of respondents expecting to use fintechs is expected to rise from the current figure of 38% to 45% in the next three years.
EY global wealth and asset management advisory leader Alex Birkin said: “Wealth managers realise that clients expect more than just strong investment performance but struggle to communicate the value of their offerings and services.
“The answer is not simply lowering fees, but rather a combination of increasing transparency and predictability when it comes to pricing models and equipping advisers with ways to communicate value beyond investment returns.”
