Wealth management industry dangerously behind the curve in adoption of digital technology

Published at 09:00 AM on 01 June 2016

Firms that don’t respond now simply won’t survive in the medium to long term, says new PwC report

  • Just a quarter of wealth managers offer digital channels beyond email
  • Contrasted by 85% of High Net Worth Individuals (HNWIs) using 3 or more digital services in their day-to-day lives
  • More than two thirds (69%) of HNWIs use online/mobile banking and more than 40% use online means to review their portfolio or investment markets
  • Only 39% of HNWIs are likely to recommend their current wealth manager


Wealth management is one of the least tech-literate sectors of the financial services industry, and is falling well behind other industries, a report published today by PwC finds. ‘Sink or swim: why wealth management can’t afford to miss the digital wave’, draws on a survey of wealth relationship managers, CEOs, FinTech innovators and HNWIs across the globe.

What wealth managers currently offer is sharply at odds with what their clients - high net worth individuals (HNWIs) - expect.

Over half of HNWIs surveyed by PwC believe it is important for their financial advisor or wealth manager to have a strong digital offering – a proportion that rises to almost two-thirds among HNWIs under 45. 47% of HNWIs who do not currently use robo-advice services* would consider using them in the future.

Wealth managers are overestimating their capabilities

Players in the wealth management sector seem to be oblivious to their technology inadequacies, with some overestimating their firm’s digital capability - rating it digitally sophisticated, when the only service offered to clients is a website.

A mere one in 10 wealth managers employs social media with their clients and many are only now investing in web portals and basic mobile apps.

Two-thirds of wealth relationship managers do not consider robo-advisors a threat to their business and repeatedly insist their clients do not want digital functionality - directly contradicting the importance their clients place on it.

Barry Benjamin, Global asset and wealth management leader at PwC, commented:

“This conflict within wealth management firms, combined with a client-base that feels only weak affiliation to its chosen providers, is creating a sector that is now acutely vulnerable, to digital innovation from FinTech** incomers, including robo-advice services”

“Ignoring this state of affairs is not an option. If firms do not respond now, they simply will not survive in the medium to long term.”

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

Andrew Hogan, UK wealth management leader at PwC commented:

“Wealth relationship managers enjoy high levels of trust among their client base. They are already recipients of a depth and breadth of data and insight spanning both financial and non-financial aspects. Any future wealth management model needs, without question, to retain this human aspect.

“However, in an increasingly complex world where the investment office may, for example, have to evaluate more than 200 different investment products for a client, and where clients are also aware of what automated technology can do in the investment advisory space, technology will be vital to keep the job both do-able and scalable for a growing audience.

“Firms that embrace and seize the digital opportunity now are in a powerful position to deliver propositions of real and sustainable future value which combine the very best of technological and human capital.”


Notes to Editors:

Barry Benjamin and Andrew Hogan are available for interviews. Please contact Ellie Raven on [email protected] or +44 (0) 7525 925 830.

*Automated platforms that provide algorithm-based portfolio management advice without the intervention of financial planners.

** PwC defines FinTech as a dynamic segment at the intersection of the financial services and technology sectors where technology-focused start-ups and new market entrants innovate the products and services currently provided by the traditional financial services industry.

PwC’s report, ‘Sink or swim: why wealth management can’t afford to miss the digital wave’, explores the expectations among HNWIs for wealth management and their use of digital technology in both a financial and non-financial context. It assesses attitudes to, and provision of, digital technology within the wealth management industry, presenting the digital opportunities that the wealth management industry is powerfully positioned to exploit. It puts forward short to long-term strategies the sector could adopt to embed digital into their operations, culture and value proposition.

The report draws on quantitative research with more than 1,000 high net worth individuals in Europe, North American and Asia with US$1 million+ in investable assets, plus qualitative interviews with 100 relationship managers, CEOs of wealth management firms and FinTech innovators.

For a copy of the report and to see the full results, please visit <www.pwc.com/wealth>


About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. © 2016 PwC. All rights reserved

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