Thought Leadership

Evolving the client experience in the age of digital differentiation

The wealth industry is undergoing a period of unprecedented change, with several inter-related factors – including the COVID-19 pandemic, ongoing digitalisation, and rapidly changing client expectations – redefining the wealth space. It is imperative that firms fully understand the impact of these changes and take steps to ensure that they continue to evolve and stay relevant.


n this detailed interview with William Ferrand, Sales Strategy and Execution Director at Refinitiv for Wealth, we unpack some recent developments within the wealth space and look at how firms can best respond to ongoing change.

How deeply has the COVID-19 pandemic impacted the wealth industry?

The effects of COVID-19 have been widespread, fundamentally impacting wealth firms in numerous ways. The most immediate and obvious impact was the sudden change in the way that wealth managers were able to interact with their clients. When traditional face to face communication between firms and investors came to an abrupt halt, those firms that were able to maintain trust via online channels and deliver value in the midst of the heightened volatility created by the pandemic were best placed to retain – or even grow – their assets under management (AUM).

The pandemic substantially accelerated the pace of digital transformation within the industry.

The increased volatility and uncertainty sparked by the pandemic led to a significant uptick in market activity, with trading volumes skyrocketing alongside a growing appetite for online advice, analytics and comprehensive data. This growing appetite is especially evident in a new generation of younger investors, who are entering the market with high expectations for the investing experience.

For many firms, this created an overnight opportunity to meet sudden and growing demand for online investment services, but the caveat was that any existing digital shortcomings were suddenly in the spotlight.

The key point to remember is that these changes are not temporary. The pandemic accelerated the digital transformation that was already underway and clients digital expectations have now been raised on a permanent basis.

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With the rapid rise of millennial investors, how can firms ensure they are catering to the expectations of younger generations? 

We are witnessing enormous growth in millennial and younger investors, made more profound by the inter-generational transfer of wealth. This incoming generation of younger investors has demonstrably different expectations to those of their predecessors. Firms therefore need to develop strategies to cater to these different expectations.

Research confirms that millennial investors are especially interested in alternative data. They also expect a better digital experience, and one that is in line with the quality of digital interactions they enjoy in other aspects of their lives, such as online shopping.

It is imperative that managers focus on providing trusted alternative data. In particular, there is a clear appetite for them to deliver accurate, transparent ESG data with enough depth and breadth of coverage to allow investors to draw meaningful comparisons.

Moreover, the data revolution and the availability of vast quantities of information have translated into a growing need for analytics. Investors now expect to be able to access tools that will help them drill down into vast pools of data and extract relevant and actionable insights.

Firms that can adjust to the new and changing expectations of investors, and successfully deliver the right data, digital tools and personalised investing experience they are looking for, are most likely to capture the attention and loyalty of a new generation of investors.

What are your thoughts on the rise of alternative data such as ESG?

As investor interest in responsible investment continues to grow, the popularity of environmental, social and governance (ESG) investing is growing in tandem to the extent I no longer consider it as an alternative dataset.

A substantial 34% of respondents in our recent global survey confirmed that they are more interested in ESG investing now than they were six to twelve months ago. This percentage rises to 46% for advisory clients and 61% for millennial investors.

ESG investing is clearly here to stay, and has become a baseline requirement for firms, rather than a “nice to have”.

That said, access to quality ESG data remains a persistent hurdle within the industry. There is still a long way to go in terms of generating sufficient data that is trusted and transparent.

Other issues, such as green-washing – where companies provide misleading environmental credentials – also need to be addressed.

In response to these challenges, Refinitiv is actively driving the volume and quality of available ESG data in the market, as well as working to standardize and normalize data, promote better disclosure and advocate for enhanced transparency.

There are also other forms of alternative data such as news analytics, that have seen a strong rise in demand and use cases. Our recent research shows over half (54%) of respondents

agree that news analytics would be useful when making portfolio management decisions.

News analytics, such as those from Refinitiv, empower advisors to pinpoint actionable insights from news sources; spot the most relevant content; gauge sentiment; and consequently better serve the needs of their clients.

What do wealth firms need to do to meet changing investor expectations and ensure a seamless digital experience for clients?

It is clear that COVID-19 has accelerated digital transformation and changed investor expectations –

and there are some immediate steps that firms can take to meet these expectations.

Our recent survey asked respondents about the specific digital enhancements and platform improvements that would benefit them the most and found that some fairly simple changes are needed. Just under a quarter (24%) of respondents selected clearer product navigation, with 22% saying they would value a single dashboard that showed all of their investments, even those with other firms.

This illustrates that it is often small changes that can have the most impact. Enhancements such as these can save clients time, simplify and streamline the investing experience, and deliver a more engaging online experience.

A key point to remember is that the pace of change is accelerating. As the market continues to evolve, wealth managers too need to adapt and evolve in line with an ever-changing dynamic. Those that succeed will be best placed to reap the many benefits offered by the ongoing digital revolution.

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