Majority of wealth managers not satisfied with their firm's technology

Pedro Gonçalves
Majority of wealth managers not satisfied with their firm's technology

The investment management industry is under-prepared to cater to the digital needs of the next generation of investors  in both the US and UK, according to a survey by global fintech InvestCloud.

Key findings from the survey include the fact that the vast majority of wealth managers (68%) know they need to improve their digital technology to survive; nearly half of investors right now (49%) use mobile apps to manage their investments, and this is only going to increase, and yet wealth managers are by and large very behind on mobile offerings; and investors are now using the digital proposition as one of the key determining factors in selecting a wealth manager (48%).

‘The State of Digital Investment Management: Adoption and Usage in 2018' surveyed 47 UK-based investment managers and 1,019 investors. The survey looks at the state of digital offerings and capabilities from investment managers. It also asks investors to describe how they use investing apps and rate them.

"The investment management industry is facing a digital crisis. Engagement both online and via mobile is now mission-critical for firms hoping to win the battle for the next generation of investors.

"Those firms who successfully manage this digital transition will gain access to a lucrative, multi-trillion-dollar market as wealth transfers to younger generations. Failure to go digital will cause them to lose out to digital advice start-ups and big tech firms making an entrance into the sector, which already have strong knowledge of user experience (UX), design and digital," John Wise, chairman at InvestCloud said in a statement. 

A majority of respondents (78%) believe that  the trend toward "high touch/high tech" (aka  "hybrid")—whereby managers continue to provide a personalised service but with greater web and mobile technology—will increase at a faster rate than the improvement in digital propositions, the report revealed.

The survey found that well over half of all investors taking part described their investment manager's digital offering as "poor" or "average." This means that for the majority of clients, they are only getting a basic level of digital engagement. Only 11% describe their manager's digital capabilities as "very strong", with a quarter (24%) saying they were "strong."