U.S. wealth management firms may be glad to know that their industry, unlike the country, has outperformed their counterparts in Europe and Asia during the first few months of the COVID-19 pandemic.
A new Aite analysis of 31 wealth management practitioners on all three continents — 12 in North America (including 11 in the U.S.), 10 in Europe and 9 in Asia — found that no U.S. firm experienced a negative impact on business performance as a result of staff working remotely, which was not the case for European or Asian firms.
North American firms were better prepared for a remote working environment because they had invested more heavily in technology with a focus on digitization, and their clients were generally comfortable working with their advisors remotely.
Wally Okby, one of the authors of the report, told ThinkAdvisor that U.S. firms got a head start on digital operations after 9/11, when many Wall Street firms were forced to resume operations in locations away from downtown New York, including many employees’ homes.
Clients Demand More Digital Engagement
More than half (53%) of wealth management firms that took the survey reported that clients were demanding a major increase in digital engagement.
“This is a remarkable shift given the wealth management industry’s traditional advisor-led business model and that management firms have been complaining for years that their clients show low adoption of digital tools,” according to the report, whose writers also include Alois Pirker and Dennis Gallant. The survey was conducted in April and May.
With clients no longer an obstacle to digital engagement, “the race is on for wealth management firms to not only meet the minimum clients requirements but to also delight clients with an outstanding digital experience,” according to Aite. “The future is far more digital and far less physical.”