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Digital Becoming ‘New Normal’ in Serving HNW Investors: SEI

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When it comes to serving wealthy clients, digital solutions are playing a growing role, says a study released today by SEI, Scorpio Partnership and NPG Wealth Management. This means financial advisors need to get their websites and other online tools to match their levels of quality, expertise and responsiveness, experts say.

The study, which highlights the views of 3,025 investors worldwide with an average net worth of about $2.9 million, finds that 92% use digital tools to support their wealth management transactions.

More than two-thirds of HNW investors under 40 assess the market through their online accounts at least once a month, according to the research, which is part of the groups’ Futurewealth Project.

“Across the board and especially among those under 40, digital plays a valuable role in their experience when you consider the amount of time they spend online and their reliance on digital for a variety of information,” said Ryan Hicke, senior vice president of SEI Wealth Platform, an outsourcing group, in a press release.

“The sticking point for this segment, though, is that many of the digital tools are not engaging,” Hicke said. “Wealth managers may need to consider upgrading their technology to ensure customers are fully engaged.” 

When asked to rate the importance of different factors on their satisfaction with wealth management transactions (on a scale of 1 to 100), HNW investors cite the advisor’s level of experience (65), market knowledge (65) and understanding of individual needs (65). They place less emphasis on the ability of a wealth manager to simulate portfolio strategies online (39), ability to customize online reporting (38) and having an easily navigable website (37).

Still, wealth managers can’t be complacent, given the increasing use of online tools. More than half of those HNW investors surveyed say they use online accounts with their primary wealth advisor each month or more frequently to see reviews of the market (55%), review performance analyses (55%), check information about securities (51%) and track portfolio evaluations (51%).

Plus, close to one in five log into their accounts each day to get reviews of the market (17%). This use, experts say, suggests that HNW investors crave access to “a holistic view of their wealth online.”

Striking the Right Balance

“The advisor is clearly the linchpin of the service delivery experience, but that doesn’t mean they should discount the value of digital tools in supporting their clients’ needs,” said Kevin Crowe, head of Solutions for SEI Advisor Network, in a statement. “The survey results clearly demonstrate that the Futurewealthy go online to see an array of information, including the state of their wealth.”

Without a doubt, digital tools are going to play “an increasingly important role in the way these up-and-coming wealthy individuals interact with their advisors,” Crowe said. “We’re quickly moving to a world where digital interaction is the new normal, and advisors need to make sure they have the technology solutions to compete.”