Is it better to meet with a client in person, or virtually?
It depends on who you ask.
According to research from FactSet, a data analytics provider, high-net-worth individuals now conduct 44% of their interactions with an adviser online. The number is lower among sub-$1 million investors, but jumps up to 48% for investors with wealth exceeding $20 million.
A separate study from Hartford Funds found the frequency of client interactions is skyrocketing. Two-thirds of the advisers surveyed already interact with their clients on at least a weekly basis, either to discuss investment strategy or simply touch-base.
A third of advisers expect interactions to increase by 50% in the next five to 10 years, a rate that surely couldn't be sustained by in-person meetings.
"As advisers thread the needle and both communicate more frequently and meet in person, it's essential that they embrace firm-approved digital alternatives (like video chat) that allow for more regular, face-to-face interactions," Julie Genjac, Hartford Funds managing director of strategic markets, said in a statement.
Sounds good. Everyone, go invest in video conferencing,
texting apps, a
client portal and maybe even a
chatbot. Chop-chop!
(More: Financial advisers embrace virtual offices)
But many advisers aren't ready to let go of the meeting. Three-quarters of the advisers in the Hartford Funds survey named face-to-face sessions as the preferred method of communication with clients and prospects. Only 12% prefer video conferencing.
Why the discrepancy?
One suggestion from Greg King, senior vice president of wealth management strategy at FactSet, is advisers are struggling with the mounting costs of running a firm with regulatory challenges. When it comes to choosing technology, they are committing dollars to operational tasks like document management and client onboarding rather than communication tools.
"Wealth managers are focusing on themselves and removing the costs of doing business," Mr. King said.
The industry also has done a much better job designing technology for mass affluent investors than it has the high- and ultrahigh net-worth people that traditionally work with advisers.
A lot of modern adviser tech was inspired by the robo-advisers or consumer apps like Uber and Amazon, and there was a common misconception that digital tools weren't compatible with the white-glove service wealthier people want.
If HNW investors thought their adviser just used a computer platform to manage assets, the adviser couldn't justify the fees, or so the thinking went.
"Wealth managers were accustomed to a human relationship, and didn't want to hand off the keys to the shed," Mr. King said.
Or maybe there is just a disconnect between what clients want and what advisers think their clients want.
According to my own far-from-scientific study (
read: Twitter poll), 72% of advisers believe their clients prefer in-person meetings.
Being the internet, of course some nerd had to come ruin the fun. Michael Kitces, director of wealth management at Pinnacle Advisory Group and publisher of the
Nerd's Eye View blog, pointed out that the problem with many of these surveys is presenting the question as an either/or choice.
According to data collected in the Kitces Research Initiative —
a forthcoming report Mr. Kitces calls "a comprehensive study on the process financial advisers actually go through to create and deliver a financial plan" — the average adviser does two in-person meetings, three telephone calls, six email chains, four newsletters, one video meeting, one in-personal educational event and a bunch of social media interactions with each client per year.
It comes down to listening to what your clients want rather than making assumptions. An older, wealthier client might be thrilled with a FaceTime call instead of having to schlep into the office, while a younger, less-affluent client may feel more encouraged and supported by speaking face-to-face.
Asking your clients directly will give you more valuable data than any survey.
