SINGAPORE (May 9): More than a third of wealth management clients across Asia-Pacific have plans to switch providers over the next three years, the EY 2019 Global Wealth Research report found.
This is because wealth management relationships are undergoing a significant period of change, driven by emerging digital solutions, new digital habits and changing definitions of what clients value, according to EY’s latest research.
And currently as no single provider is able to solve a customer’s varied needs, clients are maintaining relationships with more than five types of providers.
Given this situation, EY says wealth managers must take a step back to evaluate their offerings and redefine how they provide financial advice to better meet client needs and expectations.
Elliott Shadforth, EY Asia-Pacific wealth and asset management leader, says, “With a multitude of options for wealth management providers available to clients, especially with the intensified competition among incumbents and new entrants, firms will need to continuously raise the bar for satisfying client demands. Those who understand and deliver on what matters most to their clients, such as anticipating their major life events and proactively adjusting accordingly, will be best positioned during this period.”
The Asia-Pacific region is the highest adopter of mobile apps, with 55% of respondents in Asia-Pacific preferring mobile apps as their primary engagement channel for wealth management.
Digital channels are evolving faster than anticipated three years ago, as only 16% of respondents preferred using mobile apps in 2016.
Meanwhile, in-person and phone interactions continue to decline as the primary communications channel among wealth management clients, down from 40% in 2016 to 19% in 2018 and projected to fall below 15% in future.
But this doesn’t mean wealth managers will be out of jobs. There will still be a role for human advice delivery, but wealth managers will need to start focusing on areas where they can add most value, reconfiguring their digital delivery model to meet clients’ new expectations.
Furthermore, the research shows that the value of digital channels increases with the level of investable assets, with 59% of clients across Asia-Pacific preferring a 24 hour, any device, anywhere digital access when interacting on digital channels with their wealth manager – this is highest in Singapore at 68%.
As for China, 63% of clients placed higher importance on tech simplicity and intuitive wealth processes when interacting through digital channels.
Mark Wightman, EY Asia-Pacific wealth and asset management advisory leader, says, “As wealth managers prioritise their digital investments across multiple channels, they need to consider how client engagement may evolve in the coming years. This may mean reallocating budgets from websites to mobile apps and voice-enabled services sooner than planned, and capitalising on hybrid models where clients have access to both digital tools and human interaction. While much of this technology might not be readily available in the market today, it provides a clear indication of what clients are looking for when engaging with their wealth manager.”
