Over the past five years, it has become apparent that customer experience has come to the fore. It is much in demand by clients, who expect a Netflix-like experience from their wealth managers, and by wealth managers themselves, who want to differentiate themselves to retain clients, capture a more significant share of wallets, and benefit from referrals. It is a hot topic!

Indeed, not providing a value-added customer experience risks customers going elsewhere. Research by Ernst & Young shows that up to one-third of clients are looking to change their wealth manager in the next three years.

And McKinsey’s research shows that 70% of the client experience is based on how the client feels they are being treated, which has a lot to do with whether communication is good or not. The research results conclude that digital tools can improve the overall experience when deployed correctly.

Indeed, digital transformation elsewhere has now fed through to wealth management. Providers like Amazon have made their services and products easily accessible and give consumers personalised and tailored experiences. As a result, they now expect it in their financial affairs too.

And although wealth management has always relied heavily on being a bespoke service mainly delivered in person, things have changed. The expectation is that these elements will be provided, not just via the relationship with the wealth manager, but also through the quality and the content within digital interactions.

A hybrid model is now a critical element for firms and clients, and wealth managers that get this wrong will struggle in the future.

The client portal is, of course, key to this. Suppose a client has mentioned to the wealth manager that they have a particular interest in, say, carbon-neutral investments. In that case, they now expect to see interesting research and other content within the client portal. They might also want to see a list of carbon-neutral investment strategies and vehicles together with some form of performance data. A dynamic portal to enable effective hybrid advice and a portfolio optimiser to make recommendations using AI is an excellent combination to enhance the overall experience. 

The idea is that providing the client with this sort of detail could provoke a discussion with the wealth manager, perhaps looking at realigning the overall portfolio or looking to add in some carbon-neutral investments and then looking at a few ’what if scenarios. 

The nature of the actual communication with the adviser is also critical to the customer experience. A personalised portal can create a ‘wow’ moment with the customer if they can act on that feeling quickly by having access to the adviser over the channel of their choice and at the time of their choosing, which consolidates the wow factor. It is also important to remember that an omni-opti-channel does not mean factoring out face-to-face contact. Indeed three-quarters of customers are still likely to want face-to-face interaction with the adviser. Having the choice over how and when to contact them just deepens the relationship and makes it more likely that the number of touchpoints will increase, thus making the face-to-face more beneficial and informed when it happens.

Our own research bears this out and identifies that wealth managers know all of this and are starting to walk the walk and talk the talk. We know digital change is massively driven by customer experience. So, it is no surprise that seven out of 10 firms are looking to invest in their digital estate.

They are starting to invest in the right technology for a better customer experience. A big part of that is investing in digital tools and installing apps so that clients can get the functionality they want and that systems can talk to each other and deliver a better customer experience on those apps. It is just no good having legacy spaghetti systems that cannot communicate with each other and require lots of manual interventions, which, of course, are time-consuming and introduce many human errors. In this way, digitisation not only enhances the customer experience but also makes for operation automation and efficiency too. It essentially means that humans spend less time doing admin and more time proactively managing and nurturing relationships. 

This makes for better business, as having a good customer experience makes for retention, a more significant share of wallets, and referrals.

To illustrate the point, one of our clients upped their digital engagement (as measured by how often the client logged in) from 25% to 60% within 12 months of investing in joined-up and digital technology. The aim is now to reach a figure of 80%, which is seen as highly attainable by the client.

And in terms of business metrics, investing in technology to enhance the customer experience means another client has upped its AUM by 25% due to new client growth, increased share of wallet, and referrals. Front office productivity has also boomed, with advisers now managing some 20% more clients than previously due to efficiency gains.

The story is straightforward, investing in the technologies to provide a value-added and differentiated customer experience is a must. Wealth managers know this and are now acting on it.