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Where is the client in your digital wealth management plan?

There’s an innovation gap in wealth management, but not where you think.

Last year, like at so many firms, my former colleagues and I were working on how to interact with clients due to the constraints of pandemic lockdowns.

One long-held idea in wealth management was that the highest level of care was not delivered on digital platforms nor virtually. But it became clear even the most resistant client was adapting. According to EY, meeting face-to-face even before the pandemic represented just 16% of all wealth management sessions. When in-person meetings suddenly became unavailable, the remainder went digital.

What the client doesn’t see

The crisis forced many clients to rely on digital means to continue communicating with their advisors, and they unintentionally became more efficient with their time as a result. While screen fatigue is a thing, everyone now understands virtual meetings are the most convenient option for clients and their advisors, and it doesn’t detract from the level of care they can give and receive.

In that moment of forced change and discovery, the industry should have recognized a challenge. Our digital innovation is not keeping pace with client change. 

Digitization and automation in wealth management have been on a pendulum. More than a decade ago, the industry focused on introducing efficiency to back-office processes and distribution. Too many manual processes remain, but this effort paused as the focus switched to improving client interfaces and platforms; data security became a major issue and resources were diverted. With everyone working remotely and prohibited from coming into the office due to Covid, the focus was again on back-office efficiencies and new compliance issues.

These shifting focuses meant efforts to improve client experiences fell short; too often, the industry just took traditional paper process and digitized them, missing the opportunity to improve with the client in mind. Fintech disruptors often filled that gap. Whether it was in account opening or portfolio management, they not only digitized these processes, they made them easier to accomplish and easier to understand.

Now we are at a point where the client is evolving digitally thanks to constant exposure to Amazon and Google, where the most efficient experience wins and what I mean by efficient is an experience that combines convenience and simplicity with an approach that speaks directly to an individual client’s needs.

The client doesn't see your back-office improvements, though they benefit from it. They’re judging you instead of how the experience they have with you and your firm makes them feel. So putting faster processes and automation between ourselves and the client is only half the solution we also have to rethink the overall experience and client outreach approach.

One step to evolve

When you bring new technology into your practice, such as onboarding software or a service portal, take the opportunity to rethink your client experience. Instead of carrying old practices on into a digital form, think about where improvements or new practices can be ushered in.

To evolve your client experiences, you can start with a design sprint, as my colleagues here at AdvisorEngine® recently did. The process lets you thoroughly analyze what your client is going through when they interact with your business. Ask yourselves: What are their expectations? Did they get what they wanted easily? Would you be satisfied going through the same process?

Instead of tackling it all, focus on one process or aspect of your offering and work through making the experience better. Devise and agree on a solution, commit to it, deliver it quickly and keep going. It takes time, but you can compress months of effort into short sprints. And it shouldn’t be dismissed as ‘soft work,’ as the outcome of delighted clients is completely aligned with your business goals.

The industry development of Personal Financial Management (PFM) is a prime example of introducing technology and then adapting it based on usage and feedback. The earliest PFM tools leaned heavily on teaching and left many clients feeling judged. Subsequent iterations took a more collaborative approach, empowering clients to set goals and feel satisfaction when those goals were achieved.

This evolution highlights an important trend: the client is choosier about where they spend their money and time, and will select the most affirming experience. In practice, PFM tools had to strike a balance between a “gamified” experience that downplayed the risk of investing and made it more accessible with a “teachable” approach emphasizing market risk and the importance of saving for retirement. 

Clients are changing habits because new experiences improve on what they know, whether that’s measured in cost or time. Or, they are offered an experience that feels more tailored and worthwhile. It’s reflected in new market realities, such as how 12,000 brick-and-mortar stores were announced for closures in 2020, according to real estate data firm CoStar Group, but U.S. consumers spent an estimated $861.12 billion online in 2020, according to Digital Commerce 360. 

Be open to inspiration

Another tip: don’t just look at what your direct competitors are doing. Look elsewhere for inspiration on how to better connect with clients digitally.

I think about my son’s recent experience during his college application process. One college, in particular, didn’t respond to him with a traditional letter of acceptance. Instead, they sent a video by email a completely personalized video. The video visualized what his life would be like on campus. Visual cues his name on a locker, on a varsity jacket, what a POV of him walking through the campus would look like brought the message down to a very human, intimate level.

As a technologist, my mind went first to understand how they did it. Then, I thought about how as an industry, we still rely on so many non-dynamic methods to communicate life-defining decisions with our clients when there are so many better digital ways now to do so. This example fits perfectly in a wealth management context.

But what struck me the most was the reaction from my wife and son to this simple gesture. Their response was very emotional this inspirational video wowed them. 

Let me leave you with this question: When did your digital experience ever wow your client? TAKE A LOOK AT OUR TECH

This blog is sponsored by AdvisorEngine Inc. and CRM Software LLC. (“AdvisorEngine”) The information, data and opinions in this commentary are as of the publication date, unless otherwise noted, and subject to change. This material is provided for informational purposes only and should not be considered a recommendation to use AdvisorEngine or deemed to be a specific offer to sell or provide, or a specific invitation to apply for, any financial product, instrument or service that may be mentioned. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice and does not take into account all the circumstances of each investor. Opinions and forecasts discussed are those of the author, do not necessarily reflect the views of AdvisorEngine and are subject to change without notice. AdvisorEngine makes no representations as to the accuracy, completeness and validity of any statements made and will not be liable for any errors, omissions or representations. As a technology company, AdvisorEngine provides access to award-winning tools and will be compensated for providing such access. AdvisorEngine does not provide broker-dealer, custodian, investment advice or related investment services.  AdvisorEngine and Junxure are registered trademarks of AdvisorEngine Inc.

Raj Madan

Raj Madan

As CIO of AdvisorEngine, Raj manages all technology efforts that help run, grow and transform the AdvisorEngine solutions. Raj brings over 25 years of experience in the technology financial services industry in Wealth Management, Strategic Technology & Architecture, Treasury Services and Primary & Secondary Securities Market. Prior to joining AdvisorEngine, Raj was a Managing Director at Pershing’s BNY Mellon and managed the Common Services, Architecture and Innovation division. Along with managing many teams, Raj was the Pershing Digital Officer, a Technology Executive Committee member, and a Technology Priority Committee member. During his time in Pershing, Raj also created the Advanced Technology Labs that produced multiple innovations for Pershing solutions.


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