Hear From the Experts: Social Integration in the Online Brokerage Space

ifonsecaIsabella Fonseca, Research Director at Celent, contributes to VantagePoint, with a look at digital adoption for wealth management and brokerage firms.

Social media and mobile channels are at the forefront of firms’ strategic plans, helping to optimize their connectivity with current and prospective clients and drive growth. To date, large wealth management institutions and brokerage firms have been at the forefront of the digital adoption, deploying online, mobile platforms and social media technologies.

Firms are looking to attract and retain the millennial generation, a group of investors which utilize digital channels most often to perform banking, trading, and financial management activities. Therefore firms are adjusting their efforts to bring together a robust set of digital capabilities to capture this group of investors. Because they are tech-savvy and attracted by the low-cost services, this group is willing to turn to less expensive online alternatives such as automated advice and social trading.

More and more investors in general are switching from traditional banking in branches to mobile banking and trading. Social networks and trading communities are growing in popularity among Gen X and Gen Y investors, especially for financial advice. Social media plays a significant role in connecting individuals and peers to each other, and firms need to take advantage of this medium. The wealth management industry is one of the most regulated sectors, and even though it has to meet a number of compliance challenges, it recognizes the benefits that social media can bring. There are of course a number of guidelines firms have to follow to stay compliant.

More and more, traditional brokerage firms are incorporating social features and hybrid services to attract new clients. “Desktop-on-the-go” functionality is a must when in-person meetings are needed. Firms have invested in mobile (and particularly tablet) platforms that enable the advisor to prospect (and even initiate onboarding) as well as deliver solutions and insights. The positive impact on cost structure and scalability is one reason firms have invested so heavily in these new tools and platforms.

But ultimately, how are firms making good use of these tools? Digital channels, encompassing social, mobile, and online, are at the forefront of firms’ strategic plans, and have become integral parts of the larger client investment experience. As discussed in Celent’s recent report, “The State of Online Brokerage Platforms:

  • >Brokerage firms are dedicating considerable resources to the development of their digital strategies as an integral part of their client experience, encompassing a wide array of capabilities from robust mobile brokerage to crowd-sourced investment analytics
  • >Mobile trading is no longer a nascent technology among online brokerage firms; an ability to configure the trading screen, set up preferences, and view videos, technical indicators, analyst reports and research on a mobile device (and tablet) is becoming a baseline requirement
  • >On the online channel, brokerage firms and their software vendors are expanding portfolio reporting and insight-selling capabilities, providing investors peeks behind the performance “curtain” by revealing key drivers and enabling investors to adjust their asset allocations accordingly

Missed our recent webinar “Industry Spotlight: Online Brokerage Market Assessment and Outlook”? Download the full webcast below to learn more about online brokerage industry technology trends, developments and differentiators.


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