90% of HNW investors feel that the advice given to them by their advisor was too generic. How can wealth management institutions adapt to this surprising feedback?
In a recent report by Accenture, a shocking universal truth was revealed: almost 90% of all High Net Worth Investors (HNWI) surveyed with USD$10 million or more in personal wealth felt that the advice given to them by their advisor was too generic.
The fact that the overwhelming majority of those surveyed agreed with this statement is proof that there needs to be a paradigm shift within the wealth management industry: a cookie-cutter, one-size-fits-all approach is no longer relevant in today’s digital era, where algorithms can customize and tailor experiences to the wants and needs of users in just seconds.
Personalization has become a buzzword in today’s WealthTech spheres, where each company is vying to provide personalized experiences and portfolios that can factor in an investors’ wants and needs. Often, this includes allowing investors to tailor portfolios to their investment interests, such as sustainable themes and megatrends, or to exclude certain regions or asset classes from their portfolios.
However, there is much more to personalization than just algorithmic solutions. Personalization is about building a client-first experience that intuitively understands the client from the get-go. One such way to innovate WealthTech’s approach to personalization is to consider the context in which a client is investing.
Providing the Family Experience
Advisors need to be able to consider the fact that clients are rarely investing only for themselves: 69% of those surveyed want an advisor who interacts with and considers input from their spouse. In order to provide a holistic personalized experience, advisors need to reflect on how investment decisions would impact a client’s entire family.
One simple way to do this is via a holistic wealth planning tool. In the module offered by Privé Technologies, users can plan comprehensive financial goals for themselves and their families. The family snapshot option offers a fun and interactive way of reflecting the family via little avatars, and building individualized profiles for them. These profiles can also be used later in algorithmic portfolio optimization, creating personalized portfolios based on their current financial status.
A family-centric approach helps to remind advisors that there is more to the investor than meets the eye, allowing them to offer more tailored recommendations based on their and their families’ profiles and projected financial outlook.
Personalization is definitely a wealth management trend that is here to stay. Innovating on what it means can set apart your offerings from the others. For advisors, understanding the family can also lead to legacy clients in the future: when their children or spouse want to begin investing themselves, their profiles and financial history are already loaded onto the system and ready for them to begin with an advisor. Such a digital approach also appeals to younger and more digitally savvy investors and can help with retention, especially if they are considering starting a family in the future.