Unlocking Wealth management practices – Reshaping Client Experience with CRM

Published on July 6, 2021 by Shanteri K Rao

A 2020 Natiaxis global survey found that nearly 21% of financial professionals believe that they will be facing strong competition from robo-advisors in the next five years, while 17% of financial professionals are of the opinion that they might even lose clients to industry disruptors¹. Wealth managed by robo-advisors increased by 30% y/y in 2020 globally and is expected to reach USD1.1tn by 2024². According to Sage Wohns, the founder CEO of Agolo, the industry will see machine learning-augmented workflows across both wealth and asset management³ sectors by 2025. This phenomenon largely reflects the consolidation taking place in the wealth management industry, with technology forming the base of the transformation.

However, the role of human advisors would still be relevant, mainly due to retail investors’ confidence in human advisors and their need for personalised advice. According to McKinsey, 80% of new wealth management clients would want their advice to be data-driven, personalised and continuous⁴. Furthermore, a 2020 research report from CFA Institute found that 73% of retail investors preferred a human advisor⁵ more.

In order to deliver personalised advice, it is necessary for relationship managers to implement an operating model that offers comprehensive information about the client. A survey found that the following business strategies might help advisors expand their client base:

Furthermore, unlike the traditional client review process held annually, financial professionals need multiple interactions and frequent communication with clients these days to gain their trust, reassure them about the efficacy of investment ¬¬strategies and keep them calm at all times. A 2020 Natixis Global survey of financial professionals found that c.54% of the surveyed professionals regarded frequent and proactive client communication during turbulent times as a critical success factor to boost asset under management and enhance profits. Evidently, nearly half of the retail investors agreed that they would be willing to pay a higher fee for personalised advice and products.⁷

However, with limited resources and an ever-demanding client base, digitising client engagement appears to be the smarter option if you are looking to scale up and cater to a larger target market in an effective and efficient manner. In fact, the CFA Institute found that nearly 50% of retail investors trusted a human advisor more owing to increased use of technology⁸ . Additionally, digitising also provides multiple touch points, improves existing procedures and renders a more compelling client experience.

Alessandro Tonchia, co-founder and head of strategy at Finantrix, believes that digital technology is at the core of superior client engagement. He outlines the following attributes⁹ of digital technology:

However, leaving the status quo and embracing technology may not happen overnight. In fact, you might even face challenges, such as fragmented internal data, lack of automated marketing tools, low adoption rate and inadequate training of admin staff¹⁰. An efficient customer relationship management (CRM) tool will provide the much-needed assistance.

CRM: A door to gain deeper insights

CRM acts like a catalyst that empowers one to fulfil tasks in an efficient manner. By pulling in data from different stages of the value chain, such as client acquisition, onboarding, compliance and client servicing, a well-integrated CRM will enable a professional to take data-driven decisions and provide customised services.

Acuity Knowledge Partners, one of the leading providers of high-value research and business intelligence for over 15 years, offers bespoke solutions under its CRM arm that address the various pain points of relationship managers/wealth advisors and enable them to have more client interaction time. Acuity’s comprehensive end-to-end CRM capabilities include the following:

Along with expedited streamlining of data, you also get help in regulatory-driven reporting that not only saves 40-50% of the overall cost, but also leads to better management decisions.

The table below illustrates how Acuity Knowledge Partners empowered a European investment bank via CRM support:¹¹

The bottom line

As client expectations move from straight-jacketed investment offerings to personalised advice, getting a 360-degree view becomes more of a necessity than a luxury. In such a scenario, increasing your client-facing time along with providing faster response is one factor that will differentiate you from the rest of the crowd. Having an efficient CRM solution by your side will not only offer you an integrated view of the client, but also support and automate your day-to-day database management needs.

Bill Gates rightly said: How you gather, manage and use information will decide whether you win or lose.

Sources:

¹2020 Global Survey of Financial Professionals | Natixis Investment Managers

²Why robo-advisors may never replace human financial advisors (cnbc.com)

³Like It Or Not, Technology is Changing Wealth Management - Here's How - Plug and Play Tech Center

⁴McKinsey On Wealth Management – The “Netflixing” Of Advice (forbes.com)

⁵CFAI_TrustReport2020_EXEC-SUMMARY.pdf (cfainstitute.org)

⁶2020 Global Survey of Financial Professionals | Natixis Investment Managers

⁷CFAI_TrustReport2020_EXEC-SUMMARY.pdf (cfainstitute.org)

⁸CFAI_TrustReport2020_EXEC-SUMMARY.pdf (cfainstitute.org)

⁹https://www.fintechmagazine.com/venture-capital/three-ways-technology-galvanising-client-engagement

¹¹https://www.acuitykp.com/our-impact-stories/crm-data-migration-and-ongoing-maintenance-support-to-a-european-investment-bank/

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