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Mastering the second wave of digital wealth

Charles Smith
Charles Smith
Global Head of Digital Solutions, Refinitiv

Wealth managers are entering a new phase of digital transformation, caused by FinTech innovation and the global impact of COVID-19. During a recent Refinitiv webinar, ‘Mastering the second wave of digital wealth’, a panel of experts discussed the critical nature of digital capabilities for wealth advisors and investors alike.


  1. COVID-19 has had a profound impact on digital wealth management, with firms needing to re-evaluate and accelerate their digital offerings to clients.
  2. A panel of experts at the Refinitiv webinar, ‘Mastering the second wave of digital wealth’, discussed the important elements of digital capabilities that wealth advisors and investors must consider.
  3. Firms should focus on enhancing client relationships and creating a personalized experience for investors by honing their digital roadmaps and making ongoing changes to their digital offerings.

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The impact of COVID-19 on digital wealth

The pandemic has forced many wealth managers to take sudden, short-term steps to digital transformation. Many had to find quick solutions in the client engagement space, for example by conducting client meetings via Zoom.

What is likely to follow in the next 18 to 24 months is a period of rationalization and continued investment into digital transformation.

Our webinar audience was asked how their digital strategies have changed as a result of COVID-19. Poll results revealed that a substantial 63.6 percent had increased their investment in this area. None had decreased investment.

Watch the Webinar: Mastering the second wave of digital wealth

Spurring this trend is the realization that COVID-19 has changed client expectations around digital engagement forever, partly as a result of the digital activities of companies such as Amazon and Facebook.

This sea change should be viewed as a prime opportunity for wealth managers to invest in leading-edge technology that optimizes digital client engagement, while boosting advisor efficiency and scale.

Watch — Refinitiv Perspectives LIVE: Digital Transformation: Buy. Build. Blend.

Why are better digital experiences needed?

Firms are well aware of the importance of digital capabilities — Refinitiv research reveals that 86 percent of wealth firms consider servicing clients digitally to be highly important, and this belief is supported by the fact that financial advisors who incorporated digital tools into their practices saw a 74 percent increase in AUM and a 77 percent increase in client retention1.

Despite this awareness, a recent global survey of consumers reveals that over half (57 percent) of respondents are disappointed by brands’ online response and lack of personalization.

These perceptions will impact future spend and, in light of the fact that 37 percent said they were spending more time online since the COVID-19 crisis2, it is time for firms to harness the opportunities available to them to create better digital experiences.

Quote from Putting the hammer down: Accelerate your digital transformation. Mastering the second wave of digital wealth

Download our white paper, ‘Putting the hammer down: Accelerate your digital transformation’, to explore new strategies helping wealth management firms with their digital transformation

Prevailing trends in digital wealth

Our webinar panelists highlighted some further interesting trends in the wealth space, including the continued rise of self-directed trading and an ongoing move towards a portfolio model, in which investors service themselves in some areas, but look for advice in other, more complex situations.

There is a further growing trend towards ‘social investing’ using cohort data.

This is essentially the practice of viewing the portfolio dynamics of other investors in aggregate, especially those with similar risk profiles and other like preferences. This willingness to share information and allow others to view portfolio decisions brings positive spin-offs for all investors.

Finally the panelists noted an uptick in demand for environmental, social and governance (ESG) data, which has become a key differentiator in the analytics toolkit. Increasingly, the market is seeing the value of ESG data and incorporating this information into investment decisions by looking more closely at each company’s position on sustainability and societal impact.

Successful digital transformation

For digital transformation to be successful, firms should focus on enhancing client relationships by creating a compelling and personalized experience for investors.

Wealth managers should hone their digital roadmaps by understanding the uniqueness of their own clients, and by making ongoing changes to their digital offerings as needed.

Digitally savvy clients expect a seamless and personalized experience that extends to all aspects of their relationship with a firm, from onboarding and investment selection to trading and money management.

Quote from Putting the hammer down: Accelerate your digital transformation. Mastering the second wave of digital wealth

For their part, firms need to find innovative ways to lower their total cost of ownership while simultaneously augmenting their digital strategies and bringing them to market quickly.

One solution is the advanced use of widgets, which can provide a simplified and accelerated way for firms to customize the deployment of data and content in order to optimize their digital transformation.

Another is to use digital collaboration tools that allow investors to connect digitally via chat, voice, or video in real-time with their advisors. Advisors or support personnel can also quickly engage with an investor to answer questions or solve problems.

One final aspect to remember is that the cost of switching is continually going down as digital transformation continues. This means that client relationships are now more critical than ever. Clients no longer need to stay with a particular wealth manager but rather must want to stay, and are looking at the value wealth managers can provide.

Essentially, this presents wealth managers with an exciting opportunity to focus on differentiating digital capabilities that will help them maximize their competitive advantage by simultaneously boosting their efficiency and offering clients a compelling and engaging digital experience.

Watch the Webinar: Mastering the second wave of digital wealth

  1. Source: Accenture — Take charge of wealth management disruption
  2. Source: Kameleoon — https://www.kameleoon.com/sites/default/files/kam/documents/Research-Release-digital-trends-US.pdf

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