The following is an excerpt from a new research paper, “An adviser's guide to understanding investors' digital DNA,” that was co-developed by InvestmentNews Research and Oranj:
Digital tools can play a crucial role in moving more individuals to broadly embrace financial advice if aligned with appropriate investor interests.
Consider first the online financial account features that would facilitate saving. Presented with ten online account features that could make saving money and investing more seamless—and also make for a better experience with their financial provider—the clear winner was financial account aggregation.
Of those surveyed, 55% said that an aggregated view of their key financial accounts would be “extremely useful” or “very useful.” An account reporting dashboard was the second most popular tool, at 50%, followed by customized notifications and alerts (44%) and financial calculators (43%). Each of these tools provides investors with easy access to their own financial information in an easily digestible way. The good news is that advisers agree with investors on what is “extremely” or “very” useful, with financial account aggregators (69%) and account reporting dashboard (67%) being seen as the top tools.
Note: Investors were asked, “How useful would the following online financial account features be in making saving easier and improving your overall experience with the provider?” while advisers were asked, “How useful are the following online financial account features in improving your overall experience with your clients?”
What can financial advisers take away from these findings? Most important is that simple steps can go a long way in being able to connect with current and future investors. Since the majority of individuals have an IRA, an employer-sponsored retirement plan and a brokerage account, they appreciate the simplicity of seeing their full financial lives in one place.
The most tech-savvy investors in our survey value account aggregation more highly than other investors by wide margins, and they're also more likely to already use it. For them, the ability to review results and monitor progress is important. They also want the delivery of this information to be customized and presented when relevant and meaningful.
While advisers view technology as a way to make their practices more efficient and profitable, they acknowledge that their clients are the prime beneficiaries of any technology improvements. Advisers say the top benefits they seek to achieve when adding more technology are improved client-facing service and interactions (47%) and more efficient and impactful reporting (45%).
In practical terms, the takeaways for advisers come down to consolidate, communicate and customize. Creating the optimal digital client experience involves aggregating client data, communicating the value and usefulness of that information to the client, and making sure the delivery of that information is done in a way that suits the client's needs and preferences. Those steps can close the digital divide.
Download the full research brief, “An adviser's guide to understanding investors' digital DNA” now.
