New study reveals five ways COVID forever changed how financial advisors work with clients

Nine out of ten (92%) wealth managers agree that Big Tech institutions, such as Amazon, Apple, Facebook and Google, will enter the market, and half (50%) believe these companies will create significant disruption in the wealth management industry, according to a new joint study from Capco and the Stevens School of Business.

Entitled “How Wealth Management Firms Can Win in Turbulent Times,” the study conducted an online survey of 100 wealth management professionals to explore the current state of the wealth management market, the changing competitive landscape, and how the COVID-19 pandemic is affecting priorities and business decisions.

The study’s findings reveal how wealth management firms can meet increasing customer expectations and address new competitive threats:

Focus on providing a seamless digital customer experience. As clients come to expect a comprehensive approach to their financial lives, a seamless digital experience will provide an advantage in an increasingly competitive market.

• 92% of respondents agreed that Big Tech will enter the market.
• 50% believe these companies will create significant disruption in the wealth management industry.

Shift to remote communications. Following the COVID lockdowns, financial advisors have met with clients via video rather than face-to-face in their office, a trend the industry had previously resisted.

• 86% of respondents said their approach to client interactions would shift to remote communications or a mix of in-person and remote communication.
• 79% of respondents reported making additional investments to support remote work processes, such as video tools, upgraded network services and security, and automated customer service.
• All respondents indicated call volumes jumped at least 20% at the start of the pandemic.

Emphasis on holistic planning and advice. Firms are reducing their reliance on a product-led strategy to drive growth and instead emphasizing advice that integrates a suite of financial services provided internally or with partners.

• A meeting with a financial advisor can easily lead to a cross-discussion of the importance of healthcare planning, changing insurance needs, and even strategies for participating in cryptocurrency markets. To find new growth areas, wealth advisors need to attract younger clients and target underserved markets.
• There’s widespread agreement that the mass affluent market will continue growing, with 90% of respondents saying they expect to see a continued expansion of services offered into banking, insurance, and other financial services products.

Work with clients anywhere. Geographic location matters less, in part due to improving communications technology.

• Regional banks, who have traditionally prospected only in their own backyards, can now serve wealthy clients in areas even where they do not have a physical office or branch.
• This is especially important as an increasing number of workers, freed up to perform their jobs from anywhere, move their homes across state or across country.

Accommodating the client’s growing expectation for hyper-personalization. Face-to-face prioritization is taking a backseat to remote communication and hybrid models.

• 67% of wealth managers said they have taken major initiatives in artificial intelligence (AI) and data analytics to support decision-making and automation for investment management.
• Most wealth management firms are following a hybrid approach, teaming some degree of AI smarts with human advisors to hyper-personalize offerings for customer segments.

Robert Norris, Associate Partner at Capco said:

“Chaos always provides new opportunities for growth, resetting the competitive landscape and potentially creating new winners and losers. The winners will be those who use the disruption to forge new collaborative ways of working, build powerful engagement with clients who demand firms change to accommodate their evolving digital lifestyle needs, and deploy technology to drive down costs while accelerating innovation.”

Read the full study “How Wealth Management Firms Can Win in Turbulent Times” for actionable recommendations for how wealth management firms can meet increasing customer expectations and address new competitive threats.

ABOUT CAPCO

Capco, a Wipro company, is a global technology and management consultancy specializing in driving digital transformation in the financial services industry. With a growing client portfolio comprising of over 100 global organizations, Capco operates at the intersection of business and technology by combining innovative thinking with unrivalled industry knowledge to fast-track digital initiatives for banking and payments, capital markets, wealth and asset management, insurance, and the energy sector. Capco’s cutting-edge ingenuity is brought to life through its Innovation Labs, and award-winning Be Yourself At Work culture and diverse talent. To learn more, visit www.capco.com or follow us on Twitter, Facebook, YouTube, LinkedIn Instagram, and Xing.

ABOUT STEVENS SCHOOL OF BUSINESS

Stevens Institute of Technology, including Stevens School of Business, is a premier, private research university situated in Hoboken, New Jersey. Since our founding in 1870, technological innovation has been the hallmark of Stevens’ education and research. Within the university’s three schools and one college, 7,300 undergraduate and graduate students collaborate closely with faculty in an interdisciplinary, student-centric, entrepreneurial environment. Academic and research programs spanning business, computing, engineering, the arts and other disciplines actively advance the frontiers of science and leverage technology to confront our most pressing global challenges. As Stevens celebrates its 150th anniversary, the university continues to be consistently ranked among the nation’s leaders in career services, post-graduation salaries of alumni, and return on tuition investment.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211110005302/en/