Wealth managers need to listen to their customers before implementing any technology strategy or face getting left behind

In almost every area of modern life, technology has become non-negotiable. Wealth managers, who have traditionally been slow to modernise, are waking up to the opportunities technology can offer both them and their clients. However, for those moving down the digital route, a well thought out strategy is key.
Aware of the difficulties many wealth managers face when adopting a technological strategy, MRM gathered together experts to assess the opportunities and threats to the industry from digitalisation. You can read the full report here.
The experts agreed that any digital plan needs to place customers firmly at the heart of their proposition. Not listening to what the customer actually needs and wants can be as risky as not adopting a digital strategy at all.
Of course, implementing technology is not without its risks. Any move towards technology should be underpinned by a well-thought out plan: it is crucial that the wealth manager is clear about what they want to achieve by adopting it. A half-baked approach is not going to work, nor is cutting corners: not only could it cost wealth managers more in the event that mistakes need to be corrected, customers could also desert them if they feel wealth managers are not adequately addressing their needs.
Andrew Fay, Founder of Munnypot, emphasises the necessity of an extensive plan prior to any attempts at implementation.
“Any business which strategically decides to invest in technology will venture into significant areas of risk, so a comprehensive plan incorporating the risks and key drivers will be critical. Also, any half-hearted approach will almost certainly not deliver the appropriate value back to the business.”
Kevin Russell, Proposition Director at SEI agrees:
“Digitalising a firm will amplify any imperfections already present in the business, so it cannot be looked at in isolation.”
As the keys to an adviser’s business, the needs and wants of the customer should be at the epicentre of any decisions advisers make from a technological viewpoint. While many customers may ostensibly be happy with a ‘traditional’ wealth management model, on consideration, they may in fact appreciate a more cutting edge solution, one that is not just personalised, but also works around their busy lifestyles. Wealth managers should therefore start with the customer and move out from there.
Stephen Gazard, Managing Director of Sesame Bankhall Group, underlines the need for a customer centric approach:
“The choice of the right technology is crucial but prior to that, you need a very clear understanding of what you want from it. I’ve … seen firms spend all their time designing and developing technology solutions and forgetting they still need clients.”
Gareth Johnson, Head of Managed Investment Services at Brewin Dolphin, argues for an integrated solution where what the customer wants takes precedence over what managers consider to be traditional digital targets.
“There seems to be an assumption at times that technology and the appropriateness to customers is a simple demographics play, with technology being regarded as crucial for younger clients but not for older age segments. Segmentation in this way is misguided. Instead, we need to look at what it is the customer is trying to do. How do we use technology to make this easier and faster and more relevant to those individuals?”
However, as Barry Neilson, Business Development Director at Nucleus points out, segmentation of clients should still form part of a digital strategy:
“Firms should segment their client base, think about the different communication requirements and then use technology to vary their communications depending on the client segments.”
Far from being ‘just’ a differentiator, increasingly savvy customers now demand a certain level of functionality as standard and wealth managers cannot afford to ignore it. With the smartphone revolution leading the march towards digitalisation, many consumers are now comfortable checking their investments whilst on the move and the majority of social media engagement takes place from smartphones and similar devices, rather than PCs.[1] At the very least, consumers want real-time access to their investments, but their busy lifestyles also require flexibility – many customers won’t have time to meet face-to-face, but Skype for business and personal contact will be second nature to them.
The building blocks to an effective technological solution that works for wealth managers and their customers lies in doing what wealth managers do best anyway: speaking to customers, understanding customers and keeping their needs at the forefront of any decision.