How technology can improve wealth management for HNWIs

What we’ve noticed: Earlier this month, Insider Intelligence published its How High-Net-Worth Individuals Invest report, which highlighted details about this demographic, what it needs from wealth managers, and how it’s changing.

HNWhats? HNWIs include individuals or households with at least $1 million in liquid assets. And while only composing 6.8% of US households, they control nearly three-quarters of total household financial assets, per the Federal Reserve’s 2019 Survey of Consumer Finance.

Why it’s worth watching: Baby boomers will pass down $68 trillion in wealth over the next 30 years, meaning that HNWIs are increasingly younger and tech-savvier. And the pandemic heightened older consumers’ expectations regarding digital financial services as well.

What can wealth managers do? Wealth managers have homework to do to enhance their offerings, and we’ve identified three key things the next generation of HNWIs want improvements in:

• Onboarding. Some wealth management firms still take weeks to onboard HNW clients, but they’re now stepping up their efforts to launch end-to-end digital onboarding systems. Technology can help wealth managers streamline onboarding by automating data entry and compliance checks.
• Omnichannel capabilities. By 2024, 20% of engagement will occur face-to-face, 25% via apps, and 15% through videoconferencing, per Oliver Wyman estimates—highlighting the need for omnichannel strategies. By adding multiple customer support channels and chatbots, wealth managers can streamline communication with users across engagement points.
• ESG. HNWIs said they plan to allocate 41% of their portfolios to sustainable investment products by the end of 2020—a share that will rise to 46% by the end of 2021. However, there are challenges with such investments, including no universal standards and disclosure requirements on such data. Digital tools will be essential in forming a sound ESG strategy to assess investment targets and better serve clients.