Are private wealth managers digitally savvy enough?

OVER the past few years, there have been several debates about whether or not private wealth managers would be disrupted by technology.

Artificial intelligence (AI)-powered robo-advisors have been slowly becoming popular, attracting clients who want a better service, cheaper rates / lower commissions, and more transparent and unbiased advice about investments.

As a result, new-age companies such as Wealthfront, Betterment, and traditional companies offering automated advice such as Charles Schwab and Vanguard are all winning a bigger share of the private wealth market.

To fight this trend, banks and financial institutions such as UBS, Standard Chartered, and several others have been helping their private wealth teams bring in more technology into their offering, automate some of their routine tasks, and deliver a better digital-first experience to customers.

However, a new survey from Intertrust says that those fighting robo-advisors aren’t doing too well.

According to their survey, more than half the respondents believe the private wealth and private banking sectors are behind retail banking in terms of their adoption of innovative technology.

Despite that, just 15 percent think the industry is in danger of falling even further behind and 40 percent believe they are closing the gap.

Further, almost half of the Intertrust survey’s respondents said they believe that clients expect their wealth managers to actively invest in improving their technology, suggesting that ease of use and accessibility are now key criteria in selecting a private wealth firm.

Unfortunately, it seems as though going digital still isn’t as important a priority as it should be.

Among all of the segments surveyed in the financial services industry, Intertrust found that respondents from private wealth firms were least likely to think that their sector will create senior technology roles at a C-suite level with a mandate to drive strategic change in the next five years.

To be fair, many of the digital technology solutions that private wealth managers at banks and financial services organizations need in order to delight their customers are simple to implement.

High net worth individuals (HNWIs) typically seek three things — to be able to access their portfolio online via a system that lets them generate useful insights and reports, reasonable fees, and support from their wealth manager when they need it.

Using technology to deliver these solutions isn’t complicated. Almost all the pieces of the puzzle are now readily available in the market. Teams simply need to decide what is most suitable for their clients and bring in those systems.

The biggest challenge private wealth manager will face when upgrading systems is with regulatory compliance — and that’s where they need to focus their energy this year — in order to keep their customers and their market share.

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