How will wealth managers deliver personal service in a virtual world?

That’s one of the key messages to emerge from the 2023 EY Global Wealth Research Report, which examines the desires and behaviors of more than 2,600 wealth management clients around the world to shine new light on the industry’s evolution.

The research shows that the radical uncertainty of the last two years has had a striking effect on investors’ contact preferences. In particular, client appetite for virtual advisor interactions has ballooned since the pandemic. The proportion of clients identifying virtual consultations as their preferred advice channel for investment management jumped from 12% in 2021 to 46% today.

A deeper dive into investors’ engagement preferences reveals major shifts in key areas, such as:

• Digital expectations: High-quality digital experiences are now a minimum client expectation. Digital offerings are especially important to younger investors, with 32% of Millennials identifying them as an important driver of wealth manager choice — second only to a good performance track record (34%).
• People power: Faced with heightened uncertainty, clients continue to value human advice — especially in times of volatility, or at key moments in their investing lifecycle. For example, three out of four investors want advice on financial planning to come from a person, although it’s also notable that 46% are happy to receive that advice virtually.
• Lifecycle shifts: Engagement preferences change significantly over the investment lifecycle. For instance, in-person interactions are preferred (by 44%) to virtual ones (37%) when creating a financial plan. In contrast, virtual channels are popular for “in-flight” interactions; when taking advice on external variables, virtual contact (48%) is preferred to in-person (36%).

In our view, the best way for wealth managers to meet clients’ fast-changing engagement preferences is to offer a frequent, seamless, omni-channel combination of virtual engagement and traditional in-person advice — in effect, a next generation hybrid model.

But how can firms achieve this in practice?

One key element is placing advisors at the heart of digital transformation. Human contact remains crucial, and next-generation hybrid models should offer improved and more frequent advisor access — even if it is increasingly enabled via virtual channels. Most crucially, prioritizing up-front client face time will help to strengthen trust, making subsequent virtual or digital interactions more valuable.

Another obvious element is the digital enablement of every interaction. For example, a clear, digitally led onboarding experience – including the ability to track account status and share setup documents — is highly valued. Strong digital capabilities also allow clients to move to self-service whenever they feel a human touch is unnecessary or unwanted.

In addition, firms need to make omni-channel experiences smooth, flexible and efficient. That not only means giving investors control over their engagement choices but also maintaining holistic oversight that allows firms to monitor and manage client interactions consistently.

Finally, next-generation hybrid models need to integrate innovative digital capabilities into every channel, including in-person advice. That will maximize the value of every interaction and introduce greater collaboration into wealth management relationships. Specific examples could include:

• Harnessing AI to generate instant client insights, helping advisors to make every conversation differentiated
• Developing scenario modelling tools to simulate shocks and prepare clients for future episodes of volatility
• Using virtual channels to help clients access the right person at the right time, such as insurance brokers, tax experts, certified financial planners or market analysts

Implemented successfully, next-generation hybrid models will enhance personalization and client collaboration and education — deepening investor understanding, involvement and ownership.