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How digitalization is disrupting wealth management

Christopher Sparke
Christopher Sparke
Head of Front Office and Digital, Wealth Management, Refinitiv

Digital adoption by wealth managers still has some way to go before the industry fulfills its wish list on client engagement. An in-depth Refinitiv report examines the trends in wealth management, including digitalization and a new hybrid model for advisor-client relationships.


  1. A report on the trends in wealth management has found that 46 percent of respondents are only ‘partly satisfied’ or ‘not at all satisfied’ with their digital offerings.
  2. Wealth managers realize the importance of digital capabilities, but challenges to adoption persist, such as speed of delivery, cost, and outdated legacy systems.
  3. The role of advisors is changing to a hybrid model, combining both digital and personal interactions to create stronger relationships and drive client-centricity.

Refinitiv’s latest in-depth research on the trends in wealth management has shone a spotlight on the progress and challenges of digital adoption within the industry.

The report features interviews with leading global wealth management firms — conducted by global research and advisory firm, Aite Group — and looks at how digitalization in wealth management is changing traditional advisor relationships, among many other topics.

Digital adoption still in the starting blocks

The Transformation of Wealth Management report found that, while firms realize the importance of acquiring digital capabilities, many are still in the early stages of digital transformation.

Almost half (46 percent) of respondents reported that they are only ‘partly satisfied’ or, worse, ‘not at all satisfied’ with their current digital offerings.

Moreover, no respondents were ‘very satisfied’ with their progress to date, suggesting that there is a long way to go in terms of wealth management digitalization — and that challenges to adoption persist.

We asked the same question to our Twitter audience and it is clear to see that digital capabilities are an area for improvement, with 44 percent of respondents saying they were ‘not at all satisfied’ with the current level of digital capabilities.

Some of the most common concerns cited by respondents include cost, speed of delivery, and integration with legacy systems. Despite these challenges, the will to digitalize is evident: All respondents plan to incorporate digital capabilities in one form or another into their service models.

The digital wish list for client engagement

As part of our research, we asked respondents to rate the level of importance they attach to providing digital capabilities for a range of client-facing activities.

Topping the list was servicing clients — which includes managing daily tasks, account opening, and onboarding — with 86 percent of respondents viewing this as a ‘highly important’ digital capability.

This was followed by 69 percent who view the provision of information (for example, statements and performance reports) as ‘highly important’.

Third on the wish list was engaging clients through digital channels, for example, using video conferencing for client meetings. One-third (34 percent) of respondents rated this as a ‘highly important’ capability to acquire, with a further 46 percent considering it to be of ‘medium importance’.

These percentages indicate that there is significant support for digitalizing the full spectrum of interactions with clients, but how will this affect the traditional client/advisor relationship?

Importance of digital capabilities. Digitalization is disrupting wealth management

The hybrid advisor model

One of our report’s key conclusions is that the role of the advisor is gradually changing — from specialist to generalist in nature — with the expectation being that the industry will ultimately move towards hybrid client engagement.

The hybrid model combines both digital and personal interaction to create a client-centric experience, with data and analytics playing a key role in this new type of relationship.

In fact, our report concludes that data and analytics will pave the way to client centricity: 61 percent of respondents view analytics and creating insights as ‘very important’, and 39 percent as ‘important’ for their firms over the next 12-18 months.

This is because financial advisors are becoming less product-focused and more relationship-orientated. Having access to reliable and complete data, analytics, and actionable insights can help advisors to provide a truly client-centric service.

61 percent of respondents view analytics and creating insights as ‘very important’. Digitalization is disrupting wealth management

Understanding wealth management digitalization

This changing nature of the advisor role leads to another important consideration: In order to remain successful, firms must work to build the right advisor skill sets and implement processes that support changing roles and up-skilling.

Effective engagement will be key to future-proofing wealth management firms, and advisors will increasingly be guided by product specialists and/or technology platforms when it comes to selecting products for clients.

Firms need to support this change by ensuring that they have efficient front-to-back office processes that facilitate seamless interaction between advisors, product specialists and clients.

U.S broker-dealer comment. Digitalization is disrupting wealth management

Advisor compensation has also become a substantial topic of discussion in the industry, with elements that are not directly linked to assets or revenue now becoming compensation relevant.

For example, in future, compensation may take elements such as client satisfaction into account. At the other end of the spectrum, incentives for cross-selling are increasingly being prohibited by regulators and firms.

As the industry continues along its transformative digitalization journey, understanding where and how the big changes are happening, and responding with agility, will become increasingly important for success.

Watch: Introducing the Transformation of Wealth Management Report — Trends for 2020 and beyond

For more information on the latest trends and developments shaping the wealth management industry, download our full report on the Transformation of Wealth Management