Wealth managers keep a keen eye on leveraging technology to consistently enhance the client experience, recruit new clients, and elevate operational efficiencies. Why? Because driving growth and thriving over the long term is a continual process—one that takes intentionality, time, and insight.
To provide the insight you need, the 2022 WealthStack Study1 focuses on technology in the wealth management profession. More specifically, based on more than 400 respondents, it reveals how advisors, C-suite executives, and others across the profession are entering 2023 focused on client needs and the technology that will help elevate client service to a new level of excellence.
As a sponsor of the study, BILL got additional insight into the report findings, including more detailed data on the top-three business objectives, primary reasons for investing in technology, and priorities for technology (e.g., automation to streamline workflows and overcome inefficiencies). The survey is designed to showcase results within three main categories of technology users: Innovators, Operators, and Laggards.
Read on to see where your firm lands and what you can do to ensure continued improvement and growth moving forward.
Top three business objectives for wealth management firms
The top three business objectives are very telling, pinpointing where wealth management firms are focusing efforts and resources in 2023. While the report breaks down the objectives overall, this data explores the results according to each category (i.e., Innovators, Operators, and Laggards). In this context, the top three objectives include:
1. Improve client experience: No matter the firm’s philosophy on technology, the majority of respondents indicated that improving client experience is at the top of the list—with Innovators at 53%, Operators at 47%, and Laggards at 51%. Improving client experience means different things to different firms.
However, based on study data, it’s clear that many firms plan to focus on technology to up-level client experience with automated workflows and better communications (as you’ll soon read).
2. Add more new clients: The numbers were steady across categories, with Operators leading at 63%. Innovators came in at 52% and Laggards at 49%. Adding new clients is not an uncommon objective for firms.
The differentiator, however, is the type of clients. Does this mean any client who walks through the door or qualified (“ideal”) clients? That is, clients who best fit the firm’s business model (e.g., specific vertical or net worth minimum).
3. Deepen relationships with existing clients: While all categories listed this objective as the third-highest priority (with Innovators at 50%, Operators at 53%, and Laggards at 43%), Laggards show the lowest percentile. This could be due to an equally strong focus on “improving productivity,” where Laggards also show a 43% interest.
Top reasons for investing in technology
As we dig deeper into the data provided beyond the report, some of the top objectives become clearer—specifically concerning the reasons for investing in technology. The top three objectives reported are:
1. Improve overall efficiency and productivity: Across all categories, respondents indicated that overall efficiency and productivity were their number one priority—all at 63% or greater. This may indicate firms’ desire to enhance internal operations via streamlining and automating workflows—and in turn, improve the overall client experience. As most firms know, operational efficiency is at the heart of superior client service.
2. Deepen relationships and improve communications with existing clients: Stats show a near tie across categories, with Innovators at 55% and Operators and Laggards both coming in at 59%. Per the WealthStack Study, this is not surprising during market volatility when clients require more contact with and personalized guidance from their advisors.
Per the study, “Those concerns are only heightened when markets are volatile and investors face headwinds. In today’s environment, clients are hungry for information, worried about the health of their portfolios, and looking for guidance and reassurance.”
Also, consider that with the Great Wealth Transfer underway, the new generation of clients is exceptionally tech-savvy and demands the convenience of automation and real-time access to data. Technology allows firms to meet the needs of upcoming high-net-worth Millennial clients—both existing and prospective.
3. To provide services aligned with my existing clients' evolving needs: To maintain a competitive advantage, firms appear to be aware that they need to support clients with services that support clients’ success. Stats were steady across this category, with Innovators at 51%, Operators at 53%, and Laggards at 43%.
A value-added service like bill pay is an excellent example of how to further support wealth management clients with services that align with their evolving needs. The fact is that most high-net-worth clients are too busy to focus on daily bill pay tasks—as many are traveling, networking, and building businesses.
Offering bill pay services takes the onus off of clients and allows them to focus on other aspects of life and business. It also creates another layer of stickiness to further enhance client retention.
Top priorities for technology adoption
The top three priorities for technology are promising: 1) Client attraction and retention, 2) Digital workflow automation, and 3) Client communication tools.
Among Innovators, 43% report that they plan to adopt client attraction and retention technology solutions in the next year, and a third (35%) plan to adopt digital workflow automation tools. Operators and Laggards came in lower in both of these top two areas (as seen below) but showed promise in the area of automation, with Operators at 26% and Laggards at 20%.
The statistics do indicate an interest in using technology to attract and retain clients, which is always a key focus for growth and sustainability. Also of great interest is an interest in digital workflow automation. This supports earlier statistics where respondents indicated high interest in improving overall efficiency and productivity. Automation is key for this to occur.
If we continue with the example of bill pay, solutions such as BILL support frictionless bill pay services—allowing clients to view and approve bills online from anywhere and from the device of their choice. The system also provides full transparency into activity to offer clients peace of mind. Solutions like BILL support client attraction and retention as well as digital workflow automation. And let’s not forget that value-added services like bill pay, especially when automated, heighten the sticky factor with clients.
The WealthStack Study reported that “technology works better when it’s aligned with business goals.” In other words, to ameet the top business objective (improve client experience), firms must look to the right technologies to achieve that goal. For example, if firms offer bill pay services, they must support that service with technology that enhances the client experience.
Look to bill pay to meet top objectives
With client experience ranking at the top of the charts, wealth management firms must understand that technology is the key to a superior client experience. The right technologies support frictionless interaction, full visibility into activity, ensure on-demand and regular communications with clients, and offer peace of mind that data is accurate and current.
Other leading objectives, such as client attraction and retention and digital workflow automation, can also be achieved with leading technologies. Solutions like BILL support fully automated workflows and help create an added layer of client stickiness by supporting much-needed and in-demand services like bill pay.
The time is now to evaluate the technologies that make up your firm’s tech stack and ensure you are using the best solutions to meet your top business objectives.
Take a moment to learn more about BILL and how automating AP can increase margins and value across your wealth management firm.
1 The 2022 WealthStack Study
- Overview - Methodology, data collection and analysis by WealthManagement.com. Data collected Oct 21 through Nov 1, 2022. Methodology conforms to accepted marketing research methods, practices and procedures.
- Methodology - Beginning on Oct 21, 2022, WealthManagement.com emailed invitations to participate in an online survey to active users. By Nov 1, 2022, WealthManagement.com had received 409 completed responses.
- Response Motivation - To encourage prompt response and increase the response rate overall, email invitations and survey materials were branded with the WealthManagement.com name and logo to capitalize on user affinity for this valued brand. The first 200 respondents were afforded the opportunity to receive a $10 Starbucks gift card as a token of appreciation for their participation in the survey.
Written in partnership with WealthManagement.com
