Weathering the Pandemic Takes Digital Navigation

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Disrupted by the global impact of COVID-19, a pause in “business as usual” is providing advisory firms with an opportunity to review their business development strategy and use of digital capabilities to personalize their service.

The pandemic will force business leaders to review and revise their business continuity and succession-planning efforts. A firm must now be prepared for worst-case scenarios in which key staff are unavailable due to a quarantine, illness or worse. Insufficient clarity or transparency around investment decisions will degrade service and lead to client dissatisfaction and attrition.

Rather than scramble to force the integration of one-off solutions into your architecture, your immediate task is two-fold, involving the challenges of business risk and a growing reliance on digital channels to provide personalized client communications (investment and educational).

Your priorities are to sustain investor confidence and protect your business through continued engagement with advisors and customers. As we all work remotely, the importance of personalized timely information and service leveraging secure digital tools becomes mainstream.

Fortunately, the view that next generation wealth management firms will likely withstand the coronavirus-driven downdraft was recently underscored by J.D. Power’s 2020 U.S. Full-Service Investor Satisfaction study.

Powers’ study – completed just before the pandemic began – indicated that digital solutions increased the trust clients had in their advisor relationship, resulting in lower turnover due to investment underperformance. Additionally, advisors who used frequent digital communications such as emails, texting and online video were 50% more likely to see more assets from clients when compared to advisors who initiated no digital contact. Those asset-gaining advisors also delivered more timely, holistic and personalized services.

Clients have grown steadily more loyal to their advisors too, the study noted. Survey participants cited their primary advisor trust drivers to be, “taking responsibility for mistakes and resolving them effectively; providing useful guidance; fulfilling service expectations; and putting the interest of clients first.”

Responding favorably to their digital experiences with online retailers like Amazon, investors have also grown increasingly aware of their power in the marketplace. Twenty-five percent of participants in a Broadridge survey said they were ready to leave a wealth manager if they delivered a customer experience that they felt was subpar.