Wealth managers must make full use of what investment technology has to offer to engage investors and foster long-term relationships with them, a new global survey suggests.

To succeed in the evolving client landscape, wealth managers must make full use of what investment technology has to offer by adopting the right tools that will engage investors and help foster long-term relationships with them, findings from a new global survey suggest.

Over half (59 per cent) of the 3,477 respondents surveyed in The FutureWealth Report are satisfied with the level of technology used by wealth managers to execute financial transactions. But only four in 10 are happy with how wealth managers actually demonstrate to them the portfolio strategies they are using and why.

Interestingly, satisfaction levels were 10 and 9 per cent higher, respectively, in the Americas than the global figures. But regardless of region, the results suggest that investment technology must shift in focus from mechanical capabilities to offer investors digital access to their advisors’ opinions on current trends, industry developments and recommendations.

The Futurewealth Report: Helpful Investment Technologies is the third in a four-part series of the Futurewealth Project, published jointly by SEI, Scorpio Partnership and Standard Chartered Private Bank. Respondents had, on average, $1.9 million in net worth.

“The biggest impact of technology integration to date has been behind the scenes, in the middle and back office, where enhancements simplify the ease of transactions and minimize operational overhead,” said Joseph Ujobai, executive vice president of SEI.

But investors “want to experience these technology advancements themselves,” Ujobai said. “Wealth managers who use digital technology to pull investors into this discovery phase will stand out among competitors.”

Improving the overall client experience will benefit the wealth managers themselves in terms of productivity and efficiency.

“Technology that assists wealth managers with enhancing the client experience can be a huge advantage and improve client acquisition rates,” said Al Chiaradonna, senior vice president of SEI’s Global Wealth Platform.

Specifically, wealth managers’ goal of leveraging technology should be to develop key aspects such as client discovery, investment planning and proposal generation, Chiaradonna added.

The report suggests that by expanding and adding depth to their investment platforms, wealth managers will be able to offer investors comprehensive reviews of their wealth management choices and in turn cultivate long-term relationships with clients.

Client acquisition

Meanwhile, the report also showed that prospective clients check wealth managers’ credentials and investment recommendations via “various digital filters” prior to making decisions.

The most influential of these filters emerged as “previous personal experience with the firm,” as cited by 62 per cent, while half said tools such as ratings and reviews of a firm’s products and services are most crucial. These were followed by “website” (47 per cent); news articles about the firm and its products (46 per cent); and price comparison sites (44 per cent).

Somewhat surprisingly, given the social media craze, respondents ranked a firm’s social networking presence and blog posts as the least important factors when evaluating a financial provider.

Essentially, investors are searching for “meaningful connections” with their advisors, said Kevin Crowe, head of solutions at SEI Advisor Network. Nonetheless, they also seek assurance from other third parties that their advisors are making “sound investment recommendations,” he added.

Era of the “smart investor”

“Clients want to be in the driver’s seat and fully understand where their money is going, as well as evaluate various financial options,” Crowe concluded.

“Advisors who realize this, and put the right technology at their clients’ fingertips, will be the ones who succeed in this changing client landscape.”