The last 12 months have been tough on wealth management businesses and their clients. At the top end of the market, it’s an industry where personal relationships are key, but with face-to-face meetings impossible some clients found themselves frustrated. At a time already fraught with uncertainty, wealth advisors working from home found that they couldn’t get a full picture of their clients’ investments because they couldn’t access all the systems were used to in the office.

Add into the mix a 2019 report by EY that found that 39% of ultra-high net worth clients said they planned to switch or move money from a wealth management provider in the next three years. It’s hard to judge what effect the pandemic might have had on this figure but what is clear is that wealth management companies can’t afford to be complacent. There’s a need across the industry to improve service and smooth out issues that arose during the lockdowns of 2020 and 2021. The most effective way to achieve this is by utilising new technologies such as AI and machine learning, investing in new digital tools and technologies that will assist both clients and their advisors. 

Digital transformation was once regarded with reluctance by wealth managers, anxious that their jobs might fall away, but the benefits by far out way the negatives. While robo-advisors provide a useful service for clients whose pockets aren’t so deep, high net worth clients still expect to have a personal relationship with a living and breathing wealth manager who can provide nuanced and empathetic advice, based on their in-depth knowledge of the client, their attitudes and goals. What digital tools can do is strengthen this relationship and improve communication on both sides. 

Amongst clients the pandemic has only accelerated an increasing desire to educate themselves, increase transparency and take more control over their wealth. Real-time analysis of performance is the no 1 request for improvement for nearly 50% of investors, with real-time reporting not far behind according to Factset. Digital tools can address the gaps, giving access to real-time information anywhere, any time. They can empower clients to self-serve, show them recommendations based on other investors with similar profiles – another popular ask – and enable them to communicate with their financial advisors.

Rather than undermining the wealth manager’s position as was once feared, digital tools for clients add value and create a more engaging, trusted and hyper-personalised experience. Successful examples will have dashboards which are seamless, intuitive and easy to use, with visualisations of both individual assets and entire portfolios. It almost goes without saying that they have to be consistently reliable and trustworthy and be protected by the very highest levels of security. 

Digital onboarding of new clients is another area worthy of attention, replacing initial in-person meetings when these aren’t possible as well as simplifying the process of setting up an account and doing away with the need for complicated paperwork. Machine learning can be utilised to analyse investment style, life stage and goals as well as recommending products and performing background checks while remaining fully compliant with current laws and regulations. 

In turn, wealth management advisors can use digital tools to gain a deeper understanding of their clients, analysing their behaviour to provide better service. Data analytics, AI and machine learning can generate highly personalised advice in terms of the right strategy, actions and recommendations for each individual client. And the more a wealth manager ‘knows’ their client, the less likely that client is to switch. 

It’s likely that wealth management will always be centred around human relationships and advice that comes a personal touch but having access to digital tools on both sides saves time, increases engagement and provide reassurance, particularly when circumstances mean that face-to-face meetings aren’t an option. Once seen as a threat, one consequence of the pandemic is that the industry can now see digital wealth management tools for what they really are – a huge opportunity to add value and take client relationships to the next level. 

The BIO Agency work with financial services institutions to create new experiences that build loyalty. To find out more about what we do, contact us.

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