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5 Ways Financial Advisors Should Approach Personalization for End-Investors

Data Science and Technology

By FactSet Insight  |  January 11, 2019

In March 2018, FactSet, in association with Scorpio Partnership, conducted a global online poll of 877 investors with an average net worth of $4.88 million. Respondents hailed from the U.S., the U.K., Singapore, and Switzerland, and answered questions concerning the digital transformation of the wealth management industry. One of the key debates focused on data personalization.

Our research finds that investors are broadly open to sharing more personal information than the wealth management industry typically believes. Moreover, in addition to demographics, such behavior tends to be driven by attitudes towards technology—and hold true even when it comes to sharing information with unfamiliar brands.

While data security remains important, this evolution in client behavior suggests that investors are gearing up to expand their relationship digitally in exchange for a more tailored service. By sharing sensitive information about their personal lives, our research shows that investors anticipate enhancements to three specific areas: information delivery, the client experience and the wealth management proposition. Delivering on these expectations would also yield advantages for the advisor. Accessing clients’ data more frequently and from more varied sources will allow wealth managers to build a more holistic picture of their clients—better enabling advisors to deliver on wealth goals.

In this context, the trade-off between privacy and personalization lies with the extent to which clients trust their wealth manager’s brand to use their data in a way that will bring an enhanced service. Talking to experts from other industries sheds light on how new technologies could help wealth managers strike the right balance between the two to ultimately deliver an outstanding client experience to each investor.

Here are five ways advisors should approach personalization to deliver enhanced value to end-investors.

1) Segment clients by their digital behaviors as well as demography

Investors are broadly open to sharing personal information online, even with brands they do not know well (50%). To understand the drivers and barriers of their attitudes, wealth managers should segment investors by their digital appetites, in addition to traditional demographic qualifiers.

2) Communicate the benefits of online information sharing to investors

Eighty per cent of investors scrutinize terms and conditions of how their data will be used by brands. To improve information flow, wealth managers must be transparent about how sharing personal data will result in tangible benefits for them further down the line.

3) Redesign information delivery to land insights with impact

Only 17% of Digital Phobics give their advisors top marks for personalized information delivery, highlighting room for improvement on investment recommendations, risk mitigation guidance, and other portfolio insights. Financial institutions must review their content generation processes if they are to provide insight that is tailored and actionable to individual investors.

4) Use social insights to tailor the investor offering

Wealth managers can further enhance their propositions if they have access to more information on clients’ interests, values, and risk appetites. With some preconditions, 58% of investors are comfortable sharing information from social profiles (such as LinkedIn or Facebook) with their advisor.

5) Customize the client journey to investors’ individual priorities

Firms should invest in developing a more customized client journey that reflects investors’ specific expectations when they go online. For example, 58% of Early Adopters say their top platform improvement would be functionality that permits them to complete more wealth management themselves, while Digital Phobics and Laggards have different priorities.

For more insight download our latest eBook: Empowering Client Service with Personalization


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