Leveraging Data and Investment Planning Tools to Increase Platform Value

Looking back at the past few years, wealth management firms have had to focus a great amount of time and resources on compliance and regulatory mandates. Now that compliance challenges have begun to alleviate and wealth management firms have systems in place to meet regulatory requirements, a new challenge has risen. How do firms remain compliant while retaining and attracting new investor assets? Consumer behavior and expectations continue to evolve, making it paramount for financial institutions to enhance and embrace digital channels in order to engage with tech savvy, next generation investors and capture this influential segment.

The investment landscape is changing and participants are recognizing the need for digital transformation to engage customers at every touch point. As examined by BISRA at our recent Investment Executive Roundtable, today’s wealthiest investors have four advisors, on average, and a quarter of those clients have nearly 90% of assets with a primary advisor. Even when the majority of assets are held with a primary, it is difficult to have a comprehensive view of your portfolio without aggregating the information across all investments.

Investors are increasingly demanding access to new and innovative tools and services that allow them to more efficiently manage their investments while minimizing risk. In fact, almost 40% of Gen X investors are looking for better technology to keep track of their finances, according to Aite Group. Further to that study, the results demonstrated that priorities change from each investor age group; the top priority for Gen Y is saving for emergencies followed by developing a financial plan compared to Gen X investors, who prioritize developing a financial plan to structure their financial lives.

While few institutions give clients the ability to build or modify a financial plan, having access to dynamic and intelligent technology tools to achieve their goals is important for investors and can serve as a differentiator in today’s competitive market. Firms must provide one unified site for clients to access and manage all of their investments and tools to aggregate relevant investment information outside of the bank/brokerage. Despite the growing need, account aggregation is still not a widespread capability, as only 35% of firms offer this according to the Aite Group study.

As we head toward 2015, there is no question that priorities have changed and those wealth management firms that have not yet embraced innovative technology to fuel intelligent investment decision making will be left behind. Aggregation and portfolio management tools have become key in the race to secure and retain next generation assets.

Is digital transformation part of your long term business strategy? Join the conversation at our Bank Brokerage Executive Forum.

*Aite research insights provided by Research Director, Alois Pirker, and Senior Analyst, Sophie Schmitt during the Investment Executive Roundtable panel discussion.

Posted in Events, online brokerage, Scivantage and tagged , , , .