High tech competition and personalisation

Traditional wealth management firms are lagging behind BigTech’s ability to provide necessary information and personalisation.¹ As such, it follows that the greatest competitive pressure will come from BigTech expanding into wealth management.

This is especially true for BigTech’s ability to hyper-personalise client interactions through targeted and contextual content fuelled by habits, choices, social media use, travel history and more.²

Consumers are 40% more likely to spend more than they planned when they have a personal shopper.³ Personalisation builds brand trust and increases marketing efficiency, while advanced segmentation, such as by psychographic characteristics,⁴ can lead to increasingly successful lead-generation and acquisition.⁵

Marketing will need to work with AI and analytics to hyper-personalise CX, which can be classed as bespoke risk profiles through behavioural sciences and sentiment analysis, or portfolio construction to achieve specific and individual financial goals – such as alerts on investment decisions during market volatility, and customised client reporting.⁶

What this means for marketers:

Marketing automation needs to move past email, into deeper segmentation and personalisation, to deliver the most relevant marketing content at the right moments. The content delivered in these moments needs to help clients make their life decisions with ‘you’ in mind, such as creating suites of content that can be deployed in advance of special events such as retirement or having children. It also requires the adoption and integration of increasingly smarter technology – in the future, machine learning and AI-integrated marketing platforms will become a common tool of marketers.

ESG goes mainstream

The events of 2020 have renewed thinking on sustainability thinking, and 55% of polled investors by JP Morgan see the pandemic as a positive catalyst for ESG in the next three years.⁷ Forrester also notes that environmental crises such as wildfires across Australia and the US, combined with social unrest and new civil movements, are shining a light on the importance of sustainability.⁸

ESG funds outperformed classic indices during the pandemic, and helped cushion wider losses – investors are waking up to the protections they can offer in the future as well as long-term value creation.⁹

It follows that ESG and sustainable investing are likely to be a powerful motivational themes and drivers of growth across 2021, capitalising on investment success in the first quarter of 2020, according to CapGemini.¹⁰

Sources: 11, 12

As awareness on ESG impacts increases, so does interest in investing.

What this means for marketers:

The growing focus on sustainability means that wealth management providers need to define and differentiate their products, explaining their impact on the world as well as delivering financial returns. As interest in ESG grows in step with awareness, there is a role for marketers in decoding changing frameworks on sustainable finance. Marketers in wealth management looking to attract younger generations of HNW and UHNW individuals are recommended to bring sustainability to the top of their agenda to capture initial interest. In the future, wealth managers will have to disclose their own ESG strategy, so this should be integrated into communication and marketing plans.

Influential values

Wealth management providers are switching to a values-focused model, and are expected to deliver higher returns than profit-driven models. Asia Pacific is likely to lead the charge, where up to 1 in 3 customers make values-driven purchase decisions. Actions, statements and associations are under the spotlight prompting acts of integrity, competence and transparency to earn trust and loyalty.¹³

Clients are looking for a ‘bolder, purpose-driven narrative’ – wealth management providers will have to ensure ‘emotional resonance’ in their offerings and delivery, such as building communities that share recommendations and investor peer connections.¹⁴ Younger generations are also looking at wealth as a means to ‘meaning, purpose, connection and making a positive difference in the world’.¹⁵

Advisors are increasingly being prompted to offer financial and life-planning advice, where wealth managers become ‘financial therapists’ according to EY.¹⁶

What this means for marketers:

Marketers must think about how this translates to content themes, such as UHNW financial wellness and aligning content suites to client values. This has to be done in an authentic manner – in a way that stands up to scrutiny. For instance, if a firm establishes itself as being ESG aligned, it is expected that its business processes, governance, products and services implement ESG qualities and metrics. Marketers can be instrumental in establishing peer communities to help build relationships between clients, which could in turn bring clarity to the everyday matters that trouble or prompt questions from clients. There is also a function for technology. By analysing the customer journey for motivations and reactions, it can identify values that are dear to individuals.

Games and interactions

Self-service on websites is a top channel for HNWIs for firm or product research, or receiving updates. Popular formats for receiving information include interactive reports for clients to view complex portfolios, gamification to simulate portfolio strategies and help visualise ‘what if’ scenarios, and taking a holistic view through insights.¹⁷ Investment themes in content can be curated for each individual, along with interactive simulations.¹⁸

Deloitte’s series on the Future of Private Banking & Wealth Management identified experience as the ‘new loyalty’, defined by being able to access services anywhere, anytime, through effortless interactions and a holistic understanding of the client.¹⁹

Wealth managers are advised to develop personalised value propositions that demonstrate appeal and engagement, deliver robust advice and go beyond investments. The ‘winners’²⁰ will be those that interact with clients at the right time, with the right offer or advice, using communication preferences to determine frequency of messaging, formats and length – and even which emotional tone or style is most suitable.

Interactions between wealth managers and clients can be facilitated by software, such as digital reminders on investment opportunities the client had shown previous interest in or alerts on external events that could impact portfolio decisions. This also helps with improving the understanding of a client’s motivations and reactions for personalised service.²¹

What this means for marketers:

There is an opportunity for pushing the boundaries on ‘traditional’ formats of content and marketing, and examining how gamification can be introduced to engage and inform clients. It may also require spending more time on producing multiple ‘routes’ for interactive reports – one asset with differing information depending on the unique interests and motivations of the clients. Further thought must go into the next stage of ‘what if’ scenarios, to ‘what now’ for clients. Wealth managers and marketers must collate what they know about client needs and where information gaps may be.

Up to the minute insights

Ecommerce and digital behaviour trends over 2020 have driven ‘research-intensive consumer behaviour’ around purchases and investment decisions.²² Interpreting data and turning it into insights at a fast pace will set some wealth providers ahead of the pack,²³ especially since 2020 has increased the ‘appetite for information that helps people understand and respond’ to ongoing events.²⁴ Stock markets are likely to behave in unpredictable ways in 2021,²⁵ so individuals are likely to be looking for comprehensive information that helps them make sense of the landscape.

Most dissatisfaction was found in Europe and Japan, highlighting missed opportunities to ‘wow’ during acquisition, onboarding and advisory services.²⁶

The road ahead in 2021 requires a greater degree of insights and content for clients to navigate it, and it needs to be strategically delivered to guard against overwhelming individuals with too much information.²⁷

What this means for marketers:

The first point of action should be assessing whether there is a suitable degree of information available during acquisition, such as about a firm and products/services/investments available, into portfolio management of existing customers, such as personalised updates and educational market information. A well-managed social media strategy with strong bonds with internal experts is essential to deliver concise insights on a timely basis – the lag between gaining information and publishing it needs to be closed as much as possible.

Detailed analysis and content can follow at a later period. Deciding what types of insights are of most use can be determined during the onboarding process, with incentives to disclose information on preferences and interests. Appropriate information packs and materials should be created for the onboarding process, to arm clients with information at an early stage in their relationship with you.