The wealth management industry is “dangerously behind in digital” and CEOs know it

A report by PwC reveals that just a quarter of wealth managers offer digital channels beyond email

A report by PwC reveals that just a quarter of wealth managers offer digital channels beyond email, in contrast to 85% of High Net Worth Individuals (HNWIs) using 3 or more digital services in their day-to-day lives.

 The report, Sink or swim: why wealth management can’t afford to miss the digital wave, which surveyed 1,000 HNWIs and 100 relationship managers (RMs) globally, indicates that wealth managers and private banks are not meeting the requirements of their clients.

 PwC suggests that 47% of HNWIs under 45 who don’t use robo-advise services would consider using them in the future. The lack of digital provisions is also causing low client advocacy rates amongst clients. Only 39% of the surveyed HNW clients would recommend their current wealth manager, falling to 23% amongst UHNW clients with $10m+ in investable assets.

 Andrew Hogan, UK wealth management leader at PwC, tells PBI that one of the most surprising findings from the survey is that senior executives are fully aware of the industry’s incompetence in digital, and are aware of the consequences:

 “The CEOs recognise that if they don’t take a longer term view and don’t modernise through digitisation – there is going to be either detriment from within, because the cost/income ratio and the operational aspect of running a private bank or a wealth management organisation will suffer in the longer term through lack of modernisation and digitisation, but also through competitive pressure – either from within or from outside competitors who will create propositions and offerings to HNWs that are just fundamentally more appealing and more akin to the needs and aspirations that they have.

”Clients are highly digital in all other aspects of their lives, and yet when they interact with their wealth manager, they are underwhelmed. The experience they get by channel, by service, by product is just in many ways not up to their expectations.

”What I thought was interesting was that the relationship managers were in a slight state of denial and gave us feedback that – this is a very personal relationship, we’re not sure digital really has that big of a place. That element of lack of awareness of what their clients want could be a potential problem in the future.”