1. Discovering and acquiring new clients is key to the future of any wealth management business. To what extent, and how, do wealth managers use technology to support this need today?

Indicators of desirable leads include liquidity and transition events; for example, shareholders that are about to sell their holdings, entrepreneurs obtaining finance for their companies or senior expatriates relocating. Tracking these ‘opportunity scenarios’ in a timely fashion means processing tens of thousands of news items on a daily basis. And that cannot be done without advanced technology.

Technology, including advanced data analytics, can track events in the media, such as specific company events and wider internet and social media information. Working within a clear sales methodology, and without human intervention, technology can identify the owner of a fast-growing high-tech company. It can report she might be a very significant prospect in six months. That means sales have to start talking to the prospect now, before the competition approaches. Here, technology identifies a lead and gives an all-important early indication that it is worth pursuing.

Clarification of Terms
In the interviews that were part of our survey (Source: InvestCloud Private Banking original research, 2019), we clarified what respondents meant by “digital lead generation”. There are three distinct disciplines covered by this blanket description. They are:

Digital attraction and communication
Digital activities in the public (or semi-public) space that increase visibility of the wealth manager, or the ease of communication between firm and client. This includes social media (at corporate and RM level), content marketing, website optimisation (including search engine optimisation), digital introducers and online advertising.

Digital support for introducers and intermediaries
Using technology to identify relevant introducers and intermediaries and to support, measure and reward their contribution.

Digital lead and prospect intelligence
Using advanced technology to identify and profile leads and to introduce greater personalisation when pitching to prospects.

Technology Emphasis Among Wealth Managers (Source: InvestCloud original research, 2019)
The majority of respondents use one or more of the techniques detailed below. They evaluated their impact – Low, Medium or High - based on intensity of usage and business impact:

• Content marketing: HIGH
• Social media at corporate level: MEDIUM
• Website optimisation: MEDIUM
• Social media at RM level: LOW
• Digital introducers: LOW
• Online advertising: LOW

Lead generation and prospect intelligence is perceived as the most impactful area of action across all segments. Private banks, for example, often have marketing teams engaged in lead generation. They carry this out mostly by researching liquidity events, through periodic reviews of the press or via researching databases. Systematic use of technology has mostly been limited to feasibility studies or proofs of concept. (Source: InvestCloud original research, 2019)

2. Looking across the sector, is there an appetite today from wealth managers to use new tools and technologies to help them discover and acquire clients? How has Covid-19 impacted their approach?

Context
More than one-third of wealth firms are working with double (or more) the amount of fintech ecosystem partners than they were just one year ago. (Source: Accenture, 2018)

The financial services industry has shown a marked increase in strategic prioritisation of business building over the pandemic period. (Source: McKinsey Global Survey on Business Building 2020)

For many years, both commercial banking and wealth management business lines have relied on in-person interactions to build prospect pipelines and relationships with new clients. In the face of widespread restrictions to face-to-face meetings in 2020, relationship managers (RMs) and advisers have attempted to replicate the selling cycle in virtual settings. However, this approach will likely not be enough to rebuild the sales pipeline. Leaders should see this as an opportunity to further centralise prospecting efforts to allow the frontline to spend more time on higher-value activities, such as advice. (Source: Gartner 2021)

Some 85% of wealth managers surveyed saw investment in digital technologies as a key route to increasing adviser productivity and effectiveness. (Source: InvestCloud original research, 2019).

A convincing 87% of wealth managers surveyed aim to increase digital lead generation over the next two years. And 54% are making the digital route a top priority. This surely shows that, even in a high-touch people business, the potential of technology to drive growth is recognised. (Source: InvestCloud original research, 2019).

Another key trend is multi-market participants - predominantly Tier 1 wealth managers - showing stronger commitment to increasing digital lead generation. Fully 75% will be maximising their efforts, compared to 33% of single market firms. There is arguably a link between the bigger, more complex lead generation challenge faced by Tier 1 multi-market players, and their realisation that the digital route will help them most effectively. (Source: InvestCloud original research, 2019).

Appetite for technology uptake is present. But so are obstacles to uptake. Nine in ten firms want to increase lead generation through multiple digital channels. But six in ten of the same organisations do not yet have a good CRM system in place to help advisers efficiently manage multiple referrals, leads, prospects, interactions and relationships. (Source: InvestCloud original research, 2019).

There is also certainly an appetite from their clients. The client acquisition trail will be crowded in the coming years, and impressing digitally is crucial in the delicate prospecting, development and onboarding phases. Almost half (47%) of HNWIs already wanted greater use of digital tools by wealth managers^[i].

3. What are the tools and technologies available to wealth managers today to help them discover and acquire new clients, how do they work and how does a wealth manager make the most of them?

The key tools and technologies are those that support holistic client lifecycle management (CLM). This means covering all aspects of the client lifecycle for client fulfilment and business growth, from lead generation and prospecting through to suitability and onboarding through to ongoing client management. CLM will in time replace outdated and limited CRM implementations by horizontal point-solution vendors, and will truly provide a single integrated hub for all adviser and client data, all in one place. This might sound simple, but typically client and investor data is difficult to see in one place and has horrid consequences for operations, advisers and most importantly the clients themselves.

The ‘direction of travel’ of most tools and technologies is to automate and join up key process elements. The sales cycle is more visible and more consistently managed and each prospect has the smoothest possible client service experience

To make the most of tools and technology, wealth managers need to use them to free up the single, most valuable element in their working lives: time. This time can be better deployed to look for leads, engage with prospects and grow AUM, because previously time-consuming process elements are taken care of.

4. For those many wealth management firms that rely on traditional methods to discover and acquire clients, how can they start to use new tools and technologies to add a modern digital twist to this side of their business?

Context: it’s accurate to state that, increasingly, ‘traditional’ isn’t working (see the data points below).

Securing new referral business (52%) and standing out amongst the competition (49%) during pandemic times are the top challenges currently facing digitally challenged financial advisers (Source: AdvisorStream, 2020).

Almost 75% of advisers expressed frustration around generating new leads and standing out amongst other advisers (Source: AdvisorStream, 2020).

Over half of advisers who are still struggling with a lack of digital marketing expertise, or who don't know how to maximise marketing tools, say their primary concern is client retention. Conversely, advisers using effective digital marketing saw an incredible 40% growth in their leads compared to the pre-pandemic period (Source: AdvisorStream, 2020).

Kickstarting technology introduction and implementation for ‘digital newcomers’ requires some key steps in key areas of the business:

• Segmentation and targeting: who are the prospects we want and where are we most likely to find them without overly relying on legacy business and personal introductions?
• Marketing: how are we doing it, is it working, what improvements do we need to make?
• Pipeline visibility and management: what is actually happening with each lead, what are the internal responsibilities and dependencies and what measurable progress is being made towards defined outcomes?
• Onboarding and client lifecycle management: how can we make sure that hard-won leads and warm prospects don’t grow cold because of frustrating and long-drawn-out internal processes?

Asking these questions and then responding to them realistically will identify many areas where digital tools and technologies can be successfully implemented.

The good news for wealth managers who want to benefit from the power of digital applied to client acquisition is that they don’t have to become FinTechs. There are already proven platforms like InvestCloud that they can leverage which will fit with their existing system environments with minimal disruption.

4. What does the future look like? What are the tools and technologies available to wealth managers today to support them in discovering and acquiring clients and what tools and technologies will be available in the future to further support this important part of their business?

Context for the Future
The future is full of promise for wealth managers who embrace technology, especially an AI-first approach. One of the key advantages this approach can offer is access to newer and previously untapped customer segments. (McKinsey, 2021)

Firms can unlock significant growth by investing in their advisers—in both their growth capability and their growth mindset. (McKinsey, 2021)

RMs and advisers often spend time in an inefficient way when it comes to prospecting. Approximately 64% of new clients are generated by the top quartile of the frontline; however, this group does not spend more time prospecting (13% to 21% of their time). (Gartner 2021)

Marketing departments at banks and wealth management firms are uniquely positioned to connect with prospects. Buyers now spend about 40% of their time doing independent research online early in the sales cycle. (Gartner 2021)

There is an enormous opportunity for the industry to expand the utilisation of technology in the sales cycle. Many banks and wealth management firms have already made investments in technology and data that can give them immediate digital capabilities in sales prospecting. Both marketing and advisers can greatly benefit by adopting tools to vet leads and by using a robust and dynamic prospect portal to engage with the ones that are defined as high priority targets.

The frontline should then spend as much time as possible engaging with identified prospects and customers in high-value activities, rather than RMs and advisers prospecting themselves with often mixed success. (InvestCloud White Paper, 2020)

Future Tools and Technologies

Key directions of travel

True holistic client lifecycle management is key. With regard to CRM functionality, it should be “open CRM” like LinkedIn – whereby clients themselves can ensure that the information is accurate by participating in onboarding. One leading method to achieve this is utilising a pre-client portal – a user experience for prospects who are looking to come onboard to a wealth manager.

Digital empathy from as early as possible in the prospect engagement process is absolutely paramount, so that remote interactions are as close to face-to-face as possible.

Wealth managers need to move from complex, over-engineered and excessively elaborate processes to simple, joined-up and effective processes – and they should be on a single platform.

Relevant InvestCloud solutions

InvestCloud’s Digital Wealth solutions (part of the Blue product line) provide a complete toolset for wealth managers to better communicate with their clients, plan for outcomes and shop for and execute on financial solutions to fulfil those outcomes. For more information, please visit www.investcloud.com.