The wealth management industry is undergoing a time of significant global change as market disruption from digital start-ups and alternative savings vehicles has shown that established wealth management firms can be challenged on all aspects of the customer experience from financial advice to how wealth is managed, transferred and invested, a new survey by KPMG UK has revealed.
Research by KPMG member firms' working across multiple sectors and markets, including wealth management revealed that there are six aspects of customer experience for winning over the customer - personalisation, integrity, expectations, time and effort, resolution and empathy.
Wealth management executives surveyed said that a shift in focus is required to compete in the current market climate. The majority of firms in the survey reported that service excellence, building long-term relationships, and harnessing technology and customers, rather than product centricity, are likely to be key to their success.
KPMG also found that factors such as the ever-changing regulatory environment, the rise of fintech and advanced technology such as artificial intelligence (AI) driving the development of automated robo-advice continue to disrupt the value chain.
KPMG said wealth managers should focus on targeting their most likely future clients - high earning not rich yet. This group comprises largely of Generation Y and millennials who have thrown off the brand loyalty of previous generations and have far higher expectations of customer experience.
But successful targeting of this segment will require a rethink of the end-to-end business model, including how and what to charge for, the range of propositions on offer, and how to win hearts as well as minds, KPMG warned.
Furthermore, as the importance of delivering a strong customer experience increases, so too does the need to track and monitor overall customer satisfaction. The survey showed a key trend among respondents was a lack of consensus on how to best track customer satisfaction or identify issues.
A range of methods were reported, from net promoter score to industry service ratings and third-party research. This is a key area where the industry is ripe for innovation, and where we may see more fintech activity in coming years.
A solution that acts as a ‘TripAdviser’ for wealth could quickly record how firms are doing against key trust and service metrics, and provide advantages for customers and wealth managers alike, KPMG said.