Smart Digital Communications for the Wealth Manager of Tomorrow

Shane Meredith, Director of Wealth & Advisory at SS&C Technologies, spoke at the Hubbis Digital Wealth Asian Forum in Hong Kong. Real-time digital client communications, he explained, must be part of the wider technological revolution in wealth management, as younger clients in Asia are demanding simple, real-time, transparent and effective communication. With this, success beckons. Without it, failure looms.

“My mission today,” Meredith began, “is to emphasise how wealth managers should and should not be communicating with their clients and why client communications need to be a bigger part of the wider digital strategy for any such organisation.”

The problem, he clarified, is that we all now exist in a new reality - the high-speed digital world. “Wealth managers are all too often still relying upon paper-based communications,” he explained. “This makes it nigh-on impossible to communicate effectively, especially with the younger generations of clientele, which in turn reduces potential to maintain success or to grow.”

SS&C has been helping investment and financial firms thrive in a dynamic global market for more than 30 years by delivering a combination of innovative technology and expert services. SS&C is the largest fund administrators globally, but also have another string to their bow, namely software solutions, which focusses upon institutional buy sides and wealth managers.

Founded in 1986, SS&C has two main businesses. The first is the outsourcing business, otherwise known as fund administration. “When you think of big fund administrators globally you think of names such as Bank of New York and State Street,” Meredith noted, “but in fact, SS&C is the largest fund administrator globally, bolstered also by some recent acquisitions.”

The second element of SS&C’s business is software solutions, which focuses on servicing buy-side clients such as traditional asset managers, hedge funds, wealth managers and private banks. “We are today 22,000 employees, 134 offices globally and 30,000 clients,” Meredith added.

“With acquisitions such as EZE software, we have made we can now cover the entire lifecycle of a wealth manager or a traditional asset manager from front office, middle office, and to the back office,” he reported.

In Asia, communicating through traditional channels rather than digital puts wealth managers at a particular disadvantage as the population tends to be younger and more tech-savvy. “The median age in China,” reported Meredith, “is 37. In Indonesia, it is even lower at 30. A major global investment bank recently announced spending of USD4 billion this year in technology and they made a special mention of wealth management, highlighting that they are targeting the children of their current clients.”

Digital generations

Meredith observed that a new reality has dawned, one in which wealth managers must learn to adapt to the digital society we all now inhabit.

“You do not want to end up like the Blockbuster Video shop,” he quipped, “wondering why all your customers have disappeared, while Apple or Netflix or Amazon Prime are reeling them all in. Adapt or risk failure, because the truth as we see it is that henceforth customer loyalty is only as good as the technology offered and your customer service. So, wealth managers must rise to this challenge or risk losing their ever-increasingly tech-savvy clients to competitors.”

Meredith debunked some popular myths about digital client communication tools. “The first myth is that only millennials are interested in digital tools,” he reported. “But actually, Generation X and Baby Boomers are also joining the digital revolution. Baby Boomers, in particular, tend to be associated with the more traditional methods of communication, but they actually demonstrate prodigious skill and aptitude when learning about new technology.”

Another myth that Meredith was keen to erase was that high-net-worth individuals (HNWIs) and especially ultra-HNWIs are less interested in technology. “Research shows,” Meredith observed, “that UHNWIs do in fact embrace digital solutions if they make their lives easier.”

The fact that Asia-based managers and clients are both used to instant connectivity in communications and cashless transactions has the potential to leave some wealth managers behind the pack. “About half of China’s population are now using cloud services and instant communication apps routinely,” reported Meredith.

We each inhabit our digital worlds

The other medium for increased digital usage is the rise of smartphones in Asia. "Studies show that 700 million, or over half of China's population, are using a smartphone in 2018, with more adding to this statistic every day.”

Asian wealth managers are facing a client-base that grew up in a digital world, surfing the internet, using PCs and smartphones. "These clients want to purchase wealth products using an app,” Meredith explained, “as these days they can even file for a divorce at the touch of a button.”

Paper documents and emails containing PDFs are regarded as extremely frustrating by these tech-savvy Asian clients, yet some wealth managers are still trying to communicate with their younger clients in this way.

“Wealth managers in the US and Europe are experiencing the digital revolution in a different way, as their society still tolerates paper communication to a greater extent, even in the younger sector,” Meredith said.

Communication is all about targeted delivery

“Communicating with today’s clients in Asia is easy,” Meredith assured delegates, “provided we embrace real-time digitalisation.” Whilst these are relatively easy to implement, there are certain guidelines that Meredith recommended wealth managers follow. “Firstly, the portal or app must be intuitive, with clients being able to use it within minutes. Everything must be online and in real-time to increase customer loyalty,” he explained.

Indeed, gone are the days where end-of-day pricing is good enough. “Clients now want to see continually updated versions of their portfolio, given the volatility of the market,” Meredith advised.

In fact, research shows that a lack of responsiveness in communication is one of the top reasons that clients leave their wealth manager. “A fast response time is vital as they are looking for instant answers,” warned Meredith, “even bad news is better than no news.”

Evolve as fast as your customer

These clients are also demanding transparency in all aspects of wealth management. “All information about their investment portfolio should be readily available," Meredith explained, "as a consolidated summary on their smartphone." This data should be presented in many different forms, such as audio, video and graphical representation, making it accessible and interesting.

Meredith reminded the audience that the future is most definitely mobile – “More than half of all internet traffic comes from mobile devices, so we have to adapt to this new reality.” Asia is digital, and wealth managers must adapt, as their competitors certainly will. “If you do not meet your clients’ needs, they will abandon you, never to return, as customer loyalty is only as good as the technology and customer service on offer,” Meredith said. “In conclusion, providing relevant digital communication moving forward is one of the primary roles of the modern-day wealth manager,” Meredith offered in conclusion.

Digital natives

“Wealth managers are facing a client base that grew up in a digital world, who use computers, smartphones, who surf the Internet, who shop online, who are used to pulling up any kind of information at the touch of an app. “These are these are the clients that are likely to be frustrated by paper documents and annoyed by emails containing PDFs,” Meredith remarked, “yet this is still how some wealth managers are trying to communicate with their clients.”

Everything must be transparent, Meredith maintains. “All information about investments must be readily available and today’s clients want to see that information on their phones as well. And very importantly, the data must be in many different forms, it must be video, audio, graphs, charts, we must be able to slice and dice or customise to be as relevant as possible, directly related to the portfolio or practices of the clients.”

Client engagement and communications is more important than ever, with clients demanding individually tailored reporting from any device

Meredith concluded his talk by stating that the risk of losing clients is greater than ever before. “Effective and relevant, sophisticated and targeted digital communication is fast becoming one of the primary roles of the of the modern-day wealth manager,” he said. “Embrace the new reality.”