What if a wealth manager is not offering digital services at all?

In the article “Advisor Characteristics Vs Digital Delivery: Which Is Most Important To The Future-Wealthy?”, published by FamilyWealthReport on the 27th of March, the importance of the role of the advisor versus digital is measured. All questions asked are relevant, but the way the discussion is raised might be not completely the right angle.

In short; The research describes the fact that good personal financial advice is preferred over digital interactions with customers. They are surprised by the fact that in the younger age group the digital experience score is lower than for ‘older HNWI’s’. To me this is not surprising at all due to the higher demand this group has towards digital. So the same experience scores lower within the younger age group.

Capgemini’s World Wealth Report 2013, based on research over 4400 HNWI’s globally, clearly shows the growing importance of these digital interactions. One of the key messages: The younger the group of HNWI’s researched, the higher the importance of digital contact is to them.


The one thing that needs to be clear in discussing the importance of digital interactions is the fact that we are not talking about replacing one or the other. We are discussing the importance of having these interactions and the possibilities of doing some in a digital way. If we want to discuss the preference of direct or digital interactions you should ask 3 questions:

  1. Do you want to have direct interactions only?
  2. Do you want to have digital interactions only?
  3. Do you want to have direct and digital interactions?

I bet most of the surveyed HNWI’s will choose option 3! So why asking the question which one they prefer? The next question we should identify is to know for what services the client prefers direct interactions and for which services digital. These questions should cover areas like: Advice (complex and less complex), product information, general information, appointments, networking, knowledge sharing, payments, money transfers and financial reporting. Based on these answers we can make good comparisons about preferences.

CITI Private Banking just launched a mobile banking solution “In View” that is completely in line with the point I am making. This new solution is not replacing anything, but using digital as an enabler to test certain solutions they offer to their clients. The exciting thing is that is based on personalized solutions, instead of using digital to push mass messages.

The digital gap between wealth managers and the next generation

In one of my previous blogs I discussed the importance of establishing a relationship with the future wealth owners. The once that are currently not owning the relationship with the financial advisor but are the ‘owners to be’ in the near future (1-15 years from now).

Again this question should be top of mind of all wealth managers today and the direct versus digital discussion is a key component for them. Financial advisors are expected to shift the way they interact with their clients. Clients of today are different of those from tomorrow, where I want to emphasize the difference between father and son in the way they want to be serviced and how they perceive their future wealth managers. Advisors need to understand these differences and be ready before the actual wealth transfer takes places. This takes investment of time in building an enhanced relationship with the relationship owner as well as the owners to be!

My concern here is that the aging financial advisor population is not enough aware of today’s digital capabilities and the needs younger (future) HNWI’s have towards these. The speed of these digital developments cannot be underestimated and getting back on track is not an easy and approach I would recommend.

“The new normal”

The same article emphasized digital as “the new normal”. The increasing importance of digital in wealth management is clear, but I it is not replacing the financial advisor. Therefore asking if digital is replacing the financial advisor according to me is not completely fair. The real importance of digital interactions can be measured by asking if clients still want to stay with their wealth manager if the wealth manager is not offering digital services at all.  

4 thoughts on “What if a wealth manager is not offering digital services at all?

  1. Urs

    Well observed. I’m quite surprised how some polls and surveys are taken. You rightly say it is not if but how the mix of digital services will be with human interactions.
    I believe a big challenge for the established private wealth managers is to find a good mix of practitioners and consultative staff to design a service model which naturally extends the existing service delivery. It should improve efficiency and effectiveness.
    It would be great if you could join the LinkedIn group “Social Banking & Finance 2.0” and share this blog post.


  2. Boudewijn Chalmers Hoynck van Papendrecht Post author

    Urs, thanks for your response. I just shared the link on the blog you referred to.
    First of all I would like to say that the surveys that are taken are very valuable and good, but sometimes a little bit focused on things we already know. The big challenge you are referring to is right. But I think there already some good examples of how this could look like.

    Adding the digital/online/mobile channel on itself is not the solution. It should be an integrated part of the organization strategy to service the clients in their preferred way. Today the client is deciding and not the bank/wealth manager. So the solution goes back to an optimized segmentation strategy which also includes an adjusted pricing strategy (because the industry is also suffering from regulatory pressure on the income model)… So answering the digital questions is definitely not only related to the addition of a channel. All to align with the needs of today’s and future clients!


  3. Rob Straw

    like it. in a meeting w a big bank today, we were discussing their new hybrid service model. technologically, it is do-able. from a theoretical perspective, it is do-able. the products folks want to do it. so do the IT people. the front is hesitant. clients are hesitant. and how do you price it? let’s say, for the sake of a good argument, that we could charge 1% flat rate for advisory clients. most are ok with this, probably more than 60%. the other 40% can be lumped into two other categories: low-usage and high-usage. the model still works for them, because it’s a percentage. now, here’s the question: what do you do with a brokerage client, who is basically an advisory client without any asset allocation services? don’t underestimate the sensitivity of the brokerage clients re price. banks want to move these to the advisory model (including the digital bank stuff), but they have a hard time convincing the front about the real benefit to getting these clients to sign such a contract. Thoughts?


  4. Boudewijn Chalmers Hoynck van Papendrecht Post author

    Hi Rob, Thanks for the great comments. The concerns for front end staff and clients are well known and very common in every change/transformation with big impact I would say. The brokerage question is an interesting one.
    Big question I have with brokerage is the transparency. Do clients know what they are paying? I think they pay more than they actually think. If they know, there is a second point is that the commissions are already some kind of fee. Brokerage is another kind of service and is not the same as what we define under advice. Maybe a balance between execution only and advice?

    At the end it is an exercise of butting the business cases together. For client to show that they actually are not going to pay more and if so why; For firms to understand the income model. And it is all about the underlying message. At the end the industry as whole will change. So if a client is leaving it will face the same challenge at some point later. There are always clients leaving, but there also clients coming back, because they like what they see.



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