Now more than ever, consumers are accessing content through a multitude of digital platforms, and the financial services industry is expanding its models of information consumption in order to maintain and grow the retail investment space. Account accessibility and ease-of-use have become standard points of measurement when evaluating a product’s likely success in today’s market, and retail investment platforms must invest in functionalities that enable both.
The demand for consolidated reporting and performance is a reflection of this increased need for accessibility and ease-of-use, and the following processes are becoming increasingly relevant and standard in the retail investment space:
- –Consolidated account statements that show holdings across multiple advisors, custodians asset classes and financial advisors (FA)
- –Weighted performance for both clients and advisors, as both tend to use two types of metrics to measure the rate of return on a portfolio dollar and an on time
- –Customized and ad hoc reporting provides both advisors and clients with the ability to run ad hoc reports based on preconfigured and compliant templates
- –Compliance driven by the need for firms to know and better understand their customers’ investment needs
The integration of these processes is further impacted by emerging trends in digitization. Today’s tech savvy investors want more than just control over their finances; they want speed, customization and simplicity, as well as necessary resources for evaluating risk vs. reward, custom benchmarks and real-time capability. They are also predisposed to navigating an influx of information and data at a rapid pace and across multiple platforms, including social media sites, blogs, apps and online channels that are both computer- and mobile-based. In order to achieve success in today’s tech era, financial institutions must view digital as a fundamental, not supplemental, component of their solutions, with potential to alter the entire value chain.
Online offerings are competing more and more with traditional financial service offerings through a variety of customer-support functionalities, including web-based chat assistance, virtual/demo portfolios and data visualization. Similarly, social trading is emerging as a preferred investment model, allowing traders to communicate directly with each other and make peer-to-peer comparisons instantaneously. This provides self-directed traders with broadened access to financial markets and traders at varying levels of expertise, helping those with less experience expand their own understanding of the market.
Mobile devices are the go-to source of information for many consumers, requiring the expansion of investor and advisor functionalities. The ability to access full account information, real-time price and volume data, stock quotes and portfolio management capabilities brings a much-needed sense of security to those who desire having this valuable information at their fingertips. Mobile devices also enable the personalization that retail investors look for in their trading platforms.
Social media enables seamless integration between online and mobile channels and is designed to directly target advisors and their end clients, helping to build communications in investor-investor, advisor-advisor and investor-advisor relationships. The level of engagement that occurs through social media also brings heightened transparency and independence to investors, and is becoming even more valuable given increases in self-directed investors.
Overall, the demand for consolidated reporting and performance is largely driven by the value that investors place on technology and customization. Transparency and reporting are among the top concerns, particularly as a result of investors’ use of multi-channel services, which require new control and security features, and as the volume and scope of retail investing continues to grow, it is important for advisors to continue to build their education and knowledge portals, so that clients have access to the best resources for their needs.
Missed our recent webinar “The Race for Retail Investor Assets: Leveraging Analytics to Transform the Online Investment Experience”? Download the full webcast below to learn more about the evolving expectations of the retail investor and the technology imperatives firms face in order to remain competitive.