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Three wealth management myths busted for 2022

Sabrina Bailey
Sabrina Bailey
Global Head of Wealth Management, Refinitiv, An LSEG (London Stock Exchange Group) business

In this blog, we focus on three wealth management myths that are no longer relevant in the current digital world.


  1. To achieve success, wealth providers must re-evaluate their strategies in line with changing investor needs and preferences.
  2. A new Refinitiv sponsored survey of more than 2,000 investors and 500 wealth firms reveals three myths about investors that are no longer relevant in the post-COVID-19 wealth arena.
  3. The research finds personalised, enhanced digital capabilities among others are essential to success in 2022.

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COVID-19 has transformed the wealth industry by precipitating profound shifts and overturning several long-held beliefs about investors.

This is the key finding of our latest report, which is based on Refinitiv-sponsored research analysing responses from more than 2,000 investors and 500 firms across the wealth management industry.

An exponential rise in digital engagement between investors and providers – which was already underway but was accelerated by the pandemic – has characterised a new age of investment with altered investor views, relationships and behaviours.

Against this backdrop, many providers will need to rethink their future strategies if they are to ensure success and customer loyalty by providing solutions and experiences in line with changing investor needs and preferences.

Read the report – Debunking wealth management myths: Three outdated assumptions about investors

Sabrina Bailey quote about wealth management during COVID-19

Three wealth management myths de-bunked

Our report explores three long-held wealth industry myths that are simply no longer relevant in the current wealth arena.

1. Digital engagement only appeals to millennials

Our research reveals that older and richer clients favour digital engagement to much the same degree as millennials and, interestingly, millennials desire increased face-to-face meetings as well as digital interaction.

Responses further indicate that wealth managers and investors alike anticipate moving to a 75 percent digital, 25 percent non-digital model within the next two years, with 89 percent of investors across all age groups stating that mobile apps are their preferred channel going forward.

89% of investors say that a mobile app is their preferred method of engaging with their wealth firm

2. Only younger investors care about ESG

Responses reveal the opposite of this conventional wisdom. Sixty-one percent of billionaires say they will seek ESG investment advice over the next two years, as opposed to 34 percent of investors on average.

Our research also identifies an interesting development: investors not only want investments that reflect their social values, but they also require their providers to respect and uphold these values – 48 percent of investors, and a significant 59 percent of billionaires, chose ethical business practices as their key criterion when selecting a firm.

61% of billionaires will see ESG investment advice over the next two years

3. Personal relationships are the key to client loyalty

The conventional belief that personal relationships are the primary driver of client loyalty, with technology relegated to lower status are challenged by our findings.

The criterion most valued by investors when choosing a firm is an intuitive digital experience, selected by 49 percent of respondents. This is closely followed by ethical business practices; and the availability of active management and tax-efficient products, each of which was selected by 48 percent of respondents.

We also asked investors what prompted them to switch providers over the last year and discovered that 53 percent moved to achieve better investment performance, while 42 percent switched to access a broader range of products and services.

The criteria investors most favour when selecting wealth management firms

Strategy must reflect latest investor insights

As the wealth industry continues to undergo profound digital transformation, developing and fine-tuning a deep understanding of real investors’ needs will become essential.

Digital capabilities will remain key to future client engagement, regardless of age, but providers must ensure that they do not adopt a one-size-fits-all approach: digital experiences need to be highly personalised in line with individual investor needs.


Faqs

What are the biggest myths about Wealth Management?

The biggest myths about wealth management are that digital engagement only appeals to millennials; only younger investors care about ESG; and poersonal relationships are the key to client loyalty.