Wealth manager spending on technology to improve understanding of clients’ behavioural needs when investing is set to grow strongly over the next five years, according to behavioural finance experts Oxford Risk.
It surveyed 150 wealth managers across Europe and found 77% predict increased investment in financial personality technology, with around 13% forecasting a substantial increase in spending by companies.
Astoundingly, almost half of wealth managers surveyed (49%) still claim to rely mainly on their own intuition to assess their clients’ psychology and 57% feel they had a very good understanding of their clients’ financial personality when it comes to investments.
Around 80% of those questioned said improved technology to better understand clients’ financial personality is a way to gain a competitive advantage and win more business. Some 79% said improvements in technology mean advisers have an opportunity to enhance how they assess clients’ behavioural needs and deliver a better service.
Greg Davies, head of behavioural finance at Oxford Risk, said: “Technology and digitalisation have accelerated across all sectors and industries and to some extent, it can be argued that wealth managers have been slow to catch up. However, the research indicates that they are starting to wake up to the benefits of rapidly expanding investments in technology for assessing clients’ behavioural needs, with most convinced that they have a large part to play in the future.
“How they use the technology is another matter, however. Blending technology and behavioural science enables a comprehensive approach to suitability that recognises the complexity of each client and their emotional needs over time. It can’t just be a tick box exercise.”
