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Digital will be the new normal for wealth management

But lockdowns are highlighting how many firms aren’t transforming fast enough.
The digital gap is being exposed, and customers who don’t feel served may start to look elsewhere. Image: Shutterstock

Around a third of the global population is currently in some form of lockdown. This is placing unprecedented pressures on businesses and consumers.

The obvious response for many has been to go digital. As in-person contact has become impossible, there has been a surge in people interacting and transacting online.

A clear example was the explosion in demand for business and education apps in China as lockdown was enforced there. According to app analytics firm App Annie, during the second half of February these apps were downloaded at around twice the weekly average seen in 2019.

In South Africa there has been huge growth in the use of online grocery shopping, video conferencing apps and content streaming. Entire events have migrated to the cloud. The National Arts Festival has announced that it will be fully digital this year. Wits University will switch to remote learning and teaching from April 20.

Read: The ‘digital economy’ has arrived

Demands on wealth managers

While some industries have been able to move at least some of their business swiftly and effectively to these new channels, others have been left flat-footed. Wealth management is one of those that has found itself less than ideally prepared.

“Wealth management and private banking have historically emerged as highly personalised services, based on face-to-face meetings,” says Alberto Cuccu, CEO of wealth management digital solutions provider Objectway.

“With Covid-19, this is not possible, and it’s not even clear when it might be possible again.”

With this focus on face-to-face meetings having dominated the service offerings of these firms, there has been little incentive to explore digital solutions. As most clients and advisors tend to be older, there also hasn’t been strong demand to transform.

The imposition of lockdowns has, however, highlighted for many firms how they have neglected the digital tools available to them.

“When the markets fell, wealth managers started to call their customers, which is good enough as a first emergency approach, but is it really a client-engaging approach?” Cuccu points out. “Can the customer really get the feeling that they are being served like this? Probably not 100%.”


In a world of ubiquitous internet connectivity, there are so many other channels that advisors could use. A client app with real time portfolio information is perhaps the most obvious. This could also include a secure messaging option.

“If I, as a client, want my advisor to look at my portfolio and explain what is going on, I can write immediately to them and that message will be received by the advisor and their team,” explains Cuccu. “Someone can answer to say we will call you back as soon as possible.

“That is a way to let the customer feel real-time engaged with the service and the company,” he adds.

Rather than being purely telephonic, the follow-up call could also be through secure video collaboration, which allows for the advisor to share their screen to provide additional information. This could also be recorded for the client’s future reference.

“Digital signatures and sharing of documents will also make a difference,” says Cuccu. “If a client wants to take the opportunity to invest in a depreciated market, but they need to accept and sign a proposal in order to do so, there’s a problem if you need a physical signature.”

Using remote digital signatures, however, would make this possible.

Beyond the short term

For Cuccu, wealth management firms that aren’t able to offer these kinds of solutions are going to be caught short during this period.

“This is going to expose the digital gap,” he says. “Customers that will not feel served will probably start to look elsewhere.”

The beneficiaries will be those businesses that have already adopted digital transformation – not because they anticipated that something like this would happen, but because they saw the advantages even in normal market conditions.

Being able to serve clients digitally not only saves a lot of money, but is also more efficient. It allows wealth managers to serve more customers with the same number of front office staff.

As younger generations inherit more wealth, they will also expect to be able to interact with their advisors immediately, and through multiple channels. Wealth management firms therefore need to provide this experience.

“This lockdown will be an accelerator,” says Cuccu. “It is going to change the behaviour of companies towards clients. It will not cancel face-to-face meetings, but digital will become part of the new standard.”

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Qualified, tech-savvy wealth managers will thrive going forward, however, these insurance-linked advisors such as liberty, discovery, Sanlam , Momentum will become redundant. Product pushers, no value, and I guarantee many angry clients trying to pause contributions to investments and getting knobbed. This industry is going to take a big haircut and hopefully rid it of these linked agents.

The COVID-19 lockdown has caused a lot of stress for the whole world, but I believe that there is a silver lining. it’s given us the chance to experiment with the idea of remote work. What if it works?

Working remotely means that you are empowered to manage your own time, capitalise on your peak periods and not have to feel the stress of commuting. This on its own is a game-changer.

What’s most notable is the time saved that is usually lost with commuting to and from the office and/or clients along with the distractions that come from being in an office. The majority of advisers I’ve spoken to have said they are working a lot more as they aren’t getting distracted in the office, nor do they have to travel to see people.

Moving to cloud-based technologies such as zoom or whereby for meetings, where you can continue to be productive right until your next meeting rather packing up and commuting to it. This leads to an increase in productivity as you are able to get more done.

This also means you aren’t bound to one place. Given you have a laptop and an internet connection, you can work from anywhere and have clients in multiple provinces or even across the globe which means you can scale your business and do things a lot faster.

For the most part, the wealth management industry seems to have taken to remote work quite well. Apart from a few older, less tech-savvy advisers asking to meet only after lockdown, I have met with more wealth managers over zoom and whereby in the past 3 weeks than I had in the 2 months that preceded it.

It’s interesting that many of them are already setting expectations with their clients that this is going to be their primary way of meeting going forward and that they will have to be comfortable getting on the video and meeting in that way.

Many of them are also turning to software that their clients can use alongside them to make the advice process more engaging which in turn, empowers their clients to be in complete control of their financial destiny.

I cant wait to see the final outcome of this remote work exercise. I am almost certain that come to the end of lockdown, we will see many advice businesses institute remote work as an option and one that will be essential to the continuity of their business in the 4th industrial revolution.

End of comments.





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