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COVID-19: Accelerator of the Digital Transformation in Wealth Management?

Wealth Management

By Gerd Scherer  |  September 14, 2021

The global COVID-19 pandemic has led to changes across all areas of life with accompanying lockdowns, visitation guidelines, and contact restrictions. Office closures have pushed millions of employees into home-office environments. Where business processes made it possible, almost all face-to-face meetings were quickly converted to web sessions and digital collaboration expanded. Companies that had already made progress with the digitalization of their business processes—both internally and in external customer relations—found the "new way of working" much easier.

This drastic turnaround was not managed well everywhere. Private banking in particular—a classic relationship business characterized by close interpersonal relationships with its clients—showed some digitalization deficits even before COVID-19.

Reduced Presence Exchange in the Pandemic

The current pandemic has made weaknesses in the bank-client relationship in wealth management even more apparent. One example is the significantly limited possibilities for face-to-face exchanges between advisors and clients. In addition, many advisors could not access all client-relevant data from their enforced stay-at-home office. Put in the context of the dramatic price fluctuations on the stock markets in recent months, it is not surprising that customer satisfaction has declined and the latent willingness of customers to switch has increased once again. The market turbulence and the suboptimal exchange with advisors have, among other things, increased the desire of a growing number of clients to be informed about their assets in a different way and at shorter intervals.

Changed Customer Behavior

Demand is moving away from a quarterly or monthly static view of the portfolios to a daily or real-time view. More clients want to be able to track the digitally-visualized performance of the portfolio or individual assets independently. This need can only be inadequately met with the traditional push models of information dissemination and the interaction between advisor and client that still prevails in many cases.

Fewer clients in wealth management—and here, interestingly, there are no significant differences in the age groups—understand that they cannot satisfy their information needs in wealth management conveniently from the place of their choice, at the time of their choice, and with a terminal device of their choice, as is already customary with almost all other products and services in daily life.

Five Digital Tactics Wealth Managers Should Embrace to Win Clients in the Era of Hybrid Advice

Optimize Technology

Source: https://www.factset.com/15-digital-tactics-for-wealth-managers

Self-Empowerment of Clients

This change in client behavior and the significant increase in client expectations regarding the use of technology, information processing, and preferred communication channels lead to the desire for digital self-empowerment in wealth management. This desire was also expressed by many high net worth investors (HNWIs) around the globe in the 2018 wealth management research study conducted jointly by FactSet and Scorpio Partnership.

Harness Personalization

Source: https://www.factset.com/15-digital-tactics-for-wealth-managers

Banks would do well to make this self-empowerment possible for their customers. To what extent and in what detail the individual customer makes use of the offer depends on other components, including the simple, device-independent handling of the application, the intuitive menu navigation offered, and the attractive and clear presentation of the portfolio information.

The self-empowerment of high-end private clients should not be perceived as a disempowerment of the advisor or as competition to the advisory service, but as an important step towards a hybrid advisory approach. Digital information provision is thus not a substitute for the personal relationship with the client advisor but serves as a replacement for inadequate and outdated interaction and communication formats.

Providing the client with well-prepared content and visual information on the respective portfolio—this includes above all account overviews, asset allocations, and portfolio compositions—via corresponding portals offers the unique opportunity to finally start the much-delayed digital journey with the client.

Customizing the Client Experience

Customizing the Client Experience

Source: https://advantage.factset.com/digital-wealth-management-series

More Individual Customer Advice

If the advisor is provided with data analysis on user behavior and user preferences in the customer portal by means of artificial intelligence and machine learning technologies—including click behavior, frequency of use, duration of use, access times, and thematic focal points of customer access—the advisor can truly customize customer advice and raise it to a new level.

In addition to the pure convenience aspect, the provision of digital information offers for the customers as well as the digital preparation of detailed information on individual customer (behavior) creates scope for high-quality interaction between customers and advisors. These digital improvements also contribute to reducing the willingness to switch and long-term customer loyalty.

Banks shouldn’t see the digital transformation in wealth management as a threat, but rather accept the existing digital offers, expand them, and together with their willing clients, raise the advice to the next level.


The desire for change in wealth management and the desire to build and expand the digital journey was apparent before COVID-19, but accelerated during the pandemic, and will not be reversible even after the pandemic is over. A return to the world of yesterday or “old” normality is not to be expected because too many things have changed.

The pandemic has made the digital exchange between advisor and client socially acceptable. During the crisis, many clients have become more aware of the value of the personal and often intensive exchange with the advisor in face-to-face meetings, but even after the end of the COVID-19 crisis, many clients will not want to do without digital offers again, or at least not any longer.

Banks would do well not to see the digital transformation in wealth management as a threat, but to use the prevailing (and growing) affinity for online solutions that are easy to consume, and the growing willingness to adapt digital offers in wealth management, to quickly and significantly expand their digital presence and interaction with their clients.

This COVID-19-driven acceleration of digital transformation in wealth management offers the industry a unique opportunity to take advice to the next level in partnership with their most willing clients.

The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.

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Gerd Scherer

Senior Sales Representative, Wealth Solutions

Mr. Gerd Scherer is a Senior Sales Representative for Wealth Solutions at FactSet based in Germany. He has a wealth of experience and a deep understanding of the financial services industry and its challenges. Prior to FactSet, he spent over 30 years working for private banks in Germany and globally operating consulting firms in the wealth management arena. Mr. Scherer earned an MBA from the University of Applied Science Wiesbaden, Germany.


The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.