While apps have become the interaction channel of choice for many industries, uptake in the wealth management space is one of the lowest.
This is because the sector “faces some key challenges when it comes to digital adoption with an older client base and a legacy service model that relies heavily on high-touch, personal contact from an adviser”, said Michael Foy, senior director of wealth and lending intelligence at JD Power.
“However, to meet higher customer expectations for convenience and personalisation, while maximising adviser efficiency and productivity, wealth firms must ensure that their mobile solutions are meeting expectations for ease of use, range of services and security.”
While the report focuses on the apps available in the US, the lessons are universally applicable.
It flagged up four key findings.
- High net worth customers (with $1m (£754,258, €883,987) or more in investable assets) are significantly less satisfied with their wealth mobile apps than other customers segments.
There is a connection between affluence and age, as well as tech savviness, but wealth management firms, more than other industries, need to ensure their mobile experience is meeting the needs of the high net worth segment, as well as younger, more tech savvy customers.
- More than half (55%) of respondents indicated that they perceive the information on their app is “very secure”. Anything less than that rating is seen as failure in the eyes of the customer.
Notably, 45% of customers effectively gave their app a failing grade. Of those who feel their app is very secure, 71% said they would definitely recommend it. However, just 29% of those who had doubts would do the same.
- Clunky technology was another common criticism, with users saying their apps were too text-heavy, lacked visuals and have a dated look.
Challenges with basic tasks materially reduce satisfaction and are likely contributors to customers not using the apps provided by wealth management firms. In contrast, top performing banking and credit card apps make crucial interface updates more frequently and focus on clear, user-friendly design.
- What may not be intuitive is that a key mobile app satisfaction factor is the amount of advice and support a customer receives.
In theory, a mobile app is a self-service experience. However, among customers who indicate having a personal relationship with an adviser or team, satisfaction is higher than for those who have no such relationship.
Losing the human touch
The findings from JD Power coincide with a report from analytics company GlobalData, which highlighted that too much reliance on technology may result in the loss of the human aspect of wealth management firms’ propositions – causing their client bases to shrink.
Figures from GlobalData’s 2018 Mass Affluent Investor Survey show that having access to a human adviser or consultant is seen as important to 66.7% of mass affluent investors.
Oliver Wintle, wealth management analyst at the firm, said: “This shows the importance of the human aspect of wealth management services. If client-facing processes become over-digitalised it could alienate this large population of investors.”
Meeting clients face-to-face is time consuming (and often costly) to advisers. The use of technology can undoubtedly aid the process and using digital tools will help wealth managers deal with clients more efficiently.
Wintle added: “This could be achieved by introducing other methods and channels for advisors to communicate digitally with their clients. In order to attract and retain the lucrative mass affluent segment, a hybrid approach combining digital tools with face-to-face contact is the best possible way of managing investments.”