The majority of high-net-worth investors under 40 appreciate the human support their advisers offer, and place great value on advisers' understanding of their goals-based investment needs, a new study shows.
The three highest-rated human factors that advisers offer — understanding of individual needs, level of experience and market knowledge — each received a rating of 65 out of 100 on the importance index in the global wealth study released Thursday by SEI Investments Co., Scorpio Partnership and NPG Wealth Management.
Survey respondents put less emphasis on the digital side of the service experience. Scoring lower in importance than the human characteristics of the adviser were the ability of a wealth manager to simulate portfolio strategies online (rated 39 out of 100), the ability to customize online reporting (38) and having an easily navigable website (37).
“The most significant study result to me is that you just can't replace the importance of human contact in the advisory experience,” said Al Chiaradonna, senior vice president of the SEI Wealth Platform for North America. “From prospecting clients to maintaining relationships, if human beings and technology are to coexist, advisers must balance optimizing expenses through technology while adding value to the end-investor.”
Strikingly, though, 92% of clients under 40 reported that they use digital tools to learn more about their transactions, which highlights just how important digital technologies have become for younger investors.
In fact, 17% of those surveyed said they log in to their online account with their primary wealth adviser daily to get market reviews, and 55% said they log in at least monthly to see reviews of the market and performance analyses.
Further, young investors are generally satisfied with their wealth managers' performance in most areas except digital delivery. Just 61% said their managers do a good job of simulating portfolio strategies online, and 58% said managers do a good job of customizing online reporting.
“Wealth managers should think about customer perceptions about how the service delivery should be evolving,” the report concluded. “About a third of the world's well-heeled did not feel that they could easily communicate their preferences to their wealth manager using their web channel.”
The study, “The Futurewealth Report 2014: Upgrading the service delivery,” globally surveyed 3,025 high-net-worth respondents under 40 with an average net worth of $2.9 million.