Firms that don't respond now won't survive in the medium to long term
TORONTO, June 14, 2016 /CNW/ - More than two-thirds (69%) of high net worth individuals (HNWIs) use online/mobile banking, more than 40% use online means to review their portfolio or investment markets and over one in three are already using online services for portfolio management, finds a global report by PwC. PwC's global report, 'Sink or swim: why wealth management can't afford to miss the digital wave' reveals just a quarter of wealth managers offer digital channels beyond email. The report draws on interviews with wealth relationship managers, CEOs and FinTech innovators, and insights from a survey of 1,000 HNWIs in Europe, North America and Asia.
Wealth management is one of the least tech-literate sectors of the financial services industry, and is falling well behind non-financial services industries. HNWIs enthusiastically adopt technology and over half of them surveyed believe it is important for their financial advisor or wealth manager to have a strong digital offering. CEOs of wealth managers recognize the need to adopt digital but relationship managers resist the adoption of technology.
Yet, participants in the wealth management sector seem to be oblivious to their technology inadequacies, some even overestimating their firm's digital capability, rating it digitally sophisticated, when the only service offered to clients is a website.
"As technology transforms the Financial Services sector in Canada with the presence of FinTech, wealth management needs a stronger digital presence to provide a greater value for technology-savvy HNWIs," says Raj Kothari, Managing Partner, Greater Toronto, PwC Canada. "The findings in the global report ring true for the wealth management industry in Canada as we see a younger and more diverse pool of HNWIs in the Canadian market. Building a digital infrastructure informed by them, in order to meet their evolving needs, is required to ensure sustainable growth for wealth management in Canada."
Asked to assess what they (HNWIs) value most about their current advisor/wealth manager, their technical capabilities and digital offering ranked just eighth out of 11 options with only 39% of clients likely to recommend their current wealth manager, falling to 23% among US$10m+ clients.
According to the report, the wealth management sector globally, at best, is in the very early stages of the first ecommerce-focused wave. Very few wealth management firms have automated and digitised their back office and administrative functions. A mere one in 10 employs social media with their clients and many are only now investing in web portals and basic mobile apps.
"If firms do not get ahead of the current and future demands of the market they simply will not survive in the medium to long term," adds Kothari. "Firms that embrace and seize the digital opportunity now are in a powerful position to deliver real value which combine the very best in technology enablement and human capital."
In PwC's view, to survive, wealth management firms must:
- Accelerate efforts to adopt a comprehensive digital infrastructure that integrates every aspect of their activities and corporate culture, from the back office to how they service clients and market to new prospects
- Harness the potential of digital to realise greater efficiencies, manage costs and advance their core client proposition by drawing on a much wider range of available data
- Be willing to partner strategically with FinTech innovators to deliver technological solutions at the speed the market expects
To explore more insights from this year's report, please visit www.pwc.com/wealth.
Follow PwC on Twitter at @PwC_Canada_LLP and on Facebook at facebook.com/pwccanada.
About PwC Canada
At PwC Canada, our purpose is to build trust in society and solve important problems. More than 6,500 partners and staff in offices across the country are committed to delivering quality in assurance, tax, consulting and deals services. PwC Canada is a member of the PwC network of firms with more than 208,000 people in 157 countries. Find out more and tell us what matters to you by visiting us at www.pwc.com/ca.
© 2016 PricewaterhouseCoopers LLP, an Ontario limited liability partnership. All rights reserved.
PwC refers to the Canadian member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.
SOURCE PwC (PricewaterhouseCoopers)
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