Expanding regulatory frameworks, new types of competition and evolving client expectations are working together to create a “need to innovate” for advisors who want to grow their business and keep clients happy, according to Carrie Nelson, principal in EY’s financial services practice. “The firms that can deliver a superior client experience will be best positioned” for growth, Nelson told ThinkAdvisor.
As they think about ways to deliver that superior experience, they should think about how mobile tools can create a tighter connection.
There’s a behavioral aspect to using technology, particularly mobile, Nelson said. “Because you hold [your phone] so close to your face, you tend to trust it more or feel a physical touch that’s different from your laptop. Because there’s a physical, emotional experience with your mobile device, the firms and advisors who can harness that” to give clients a physical and emotional experience with their firm will be better positioned to retain those clients long term.
“The mobile phone engenders intimacy and a feeling of being permanently tethered to loved ones,” according to a 2006 paper by Jane Vincent, a research fellow at the University of Surrey’s Digital World Research Centre. In “Mobilisation: The Growing Public Interest in Mobile Technology,” James Harkin wrote that “mobile phones have become so intimately a part of us that they have come to represent an extension of our physical selves – an umbilical cord, anchoring the information society’s digital infrastructure to our very bodies.”
A 2015 report from the Pew Research Center found 64% of U.S. adults have a smartphone and for one in five, it’s the main way the access the internet.
Consumers in the United States are especially receptive to adopting fintech tools in general. EY’s FinTech Adoption Index found 16.5% of digitally active U.S. consumers had used at least two fintech products in the six months prior to being surveyed, second only to consumers in Hong Kong. The survey also found more than 11% of consumers use fintech tools because they offer a better online experience and functionality and 10.3% said they provided better quality of service.
The quality of service clients receive is important, as 40% of clients surveyed for EY’s 2016 Global Wealth Management report said they were open to switching their wealth manager under the right circumstances, Nelson said. “That really underscores the need to focus on and enhance the client experience.”
Digital advice tools are one way advisors can serve those clients’ needs, particularly a hybrid model with digitally enabled human advisors, Nelson said.
“The role of the advisor is shifting,” she said, and clients are “wanting help with spending habits or reaching life goals […] in addition to the standard asset allocation advice or other activities that really could be automated.”
“The best way to stay ahead is to embrace the change and focus on creating that client experience,” Nelson said. She pointed out that even high-net-worth clients are open to using digital tools. A May survey by MyPrivateBanking found over 70% of investors with at least $100,000 in investable assets said automated tools can positively impact their advisor’s process. The Swiss research firm found in June that private banks and wealth managers are responding by offering apps designing specifically for HNW clients’ needs.
Clients also want transparency and to be able to rate their advisors, Nelson said. “Being open to some of these changes, helping and even encouraging their clients to connect in public forums is a good idea.”
— Read How to Survive the Fintech Onslaught on ThinkAdvisor.