The digital tide is risingpar Andrew Rickard | October 31 2016 09:45AM
While clients have been slow to abandon human financial advisors for robots, those who have made the switch say they are happier with the services they receive.
In an article posted to the McKinsey and Co. web site last week, authors David Schiff and Adele Taylor say they reviewed their firm's proprietary research on more than 10,000 affluent clients in the United States as well as other industry data to discover what is working for "digital attackers" in the wealth management business.
While a slew of robo-advisors have entered the market recently, the authors point out that the amount of assets migrating away from human advisors to automated platforms is relatively low. However, they warn that clients of these digital newcomers report levels of satisfaction that are 5 to 10 times higher than clients of traditional wealth managers. They say this is mostly because of "improved experiences". The report also notes that 30% to 35% of searches for investment products now go through digital channels rather than through family and friends, word-of-mouth, and other sources.
"Digital engagement will continue to gain importance"
“We believe digital engagement will continue to gain importance in wealth management, and the prospect and client and experience is already becoming one of the industry’s most potent strategic weapons,” conclude Schiff and Taylor. “That means that the race to deliver the best digital client (and prospect) experience will become even more competitive. The pressure is now on incumbents to take quick but thoughtful actions to raise their digital games.”