With the latest buzz around “commission-free/free trading”, free has become quite the craze in the investment arena. But is free always the best alternative?
Would you recommend your best clients use a commission-free/free trade site to manage their wealth on their own? Probably not since they come to you for the value of your advice and guidance. So maybe free isn’t always the best option.
With that said, then why do we see so many wealth management firms rely on “free” when it comes to their client digital experience?
Now, more than ever, the client digital experience is key to retaining your current clients and gaining new ones, especially those millennials. Today’s investor is looking for a digital experience that mirrors what they get when they interact with retail experiences like Amazon or Netflix.
Are you providing that kind of experience with your client portal?
If you are like many wealth management firms, particularly bank brokerage firms, the answer to that question is probably NO.
Many firms are held captive by the “free” platform offered by their clearing firm. When asked what they do for digital, the answer is usually “something we get from our clearing firm or back office.” While these platforms serve to “check the box” for a primary interface for the bank’s wealth business, they are not conducive to the type of experiences desired by today’s investors.
Let’s look at what free gets you (or doesn’t):
- Can the site be integrated into the existing bank portal under a single login?
- Can the site be fully branded to your wealth experience in a similar manner as your primary banking experience?
- Can the digital experience be tailored to the relationship your client has with your firm?
- Can it show account data from multiple custodians under a single login and experience?
- Is the mobile app branded to your firm, and available under your logo on the App Store/Google Play, or are clients having to look for and enter the clearing firm name (not yours) to see the app?
- Does the clearing firm or back-office offer technology to allow you to control the UX?
- Are you working with a software firm with a long term vision, or a “one size fits all” platform designed as an accommodation and nothing more?
And oh, by the way, does the web experience you provide your clients look EXACTLY the same as all the other firms that use that clearing firm?
So, you might be getting the platform for free, but what does it cost you…you lose out on promoting your brand, you lose out on delivering an engaging experience when your client has to log into multiple sites to understand their total relationship, you lose out on the opportunity to cross-sell your wealth clients on your other products and services and, most likely, you will lose out on much of the “Great Wealth Transfer” where Cerulli Associates estimates as much as $68 trillion will move between generations within 25 years.
Your clients desire the best. That is why they hired you and trust your firm for their wealth management needs. Do you want to provide your best clients with a subpar digital experience?
Firms that invest in a leading digital experience reap the benefits: satisfied clients, longer relationships, a greater share of wallet. You can stay with the “free” platform your clearing firm is providing but think about how much that “free” platform is really costing you!