During Covid-19's spring peak, many consumers wanted to talk to advisors and firms via mobile apps, only to find that there was no one to engage with them.
In May and June, 31% of investors said they had had no recent advisor contact, despite volatility in financial markets throughout the spring, according to the “J.D. Power 2020 U.S. Wealth Management Mobile App Satisfaction Study.” Just 2% of more than 2,700 respondents said they had received communications via mobile apps or secure messaging.
As consumer use of technology takes another leap forward as a result of the Covid-19 pandemic, the wealth management industry is still playing catch-up. Perhaps nowhere is that better illustrated than in the adoption and use of mobile applications to keep in touch with clients during the virus-induced lockdowns.
A third of both self-directed and advised investors said they’ve used their wealth manager’s mobile app more frequently during the pandemic, with more advised investors, 36%, saying their mobile app use has increased than self-directed investors, 17%.
“No industry is immune to the consumer shift toward mobile apps, as usage continues to increase across the board,” said Amit Aggarwal, senior director of digital solutions at J.D. Power, in a released comment. “Wealth management firms need to recognize that the app is increasingly becoming their front door. Accordingly, they need to spend the time making sure that this channel is addressing customer needs, easy to navigate and seamlessly integrated into all facets of their business.”
Investors are relatively dissatisfied with their wealth manager’s mobile app, according to the study. Study participants rated satisfaction with their wealth managers’ apps at 849 on a scale of 1,000, a lower score than the ones enjoyed in other areas of financial services like credit card services (which scored 865), insurance (864) and banking (852).
Part of the problem, according to J.D. Power, is the nature of financial advisor mobile apps. According to its analysis, just 35% of wealth management apps offer chat functionality, and only 41% support secure messaging. The adoption of chat, social media and messaging has been slow to catch on among financial advisors because of their compliance concerns. Yet J.D. Power claims that app users frequently demand these features.
Advisors who adopt a mobile app for client communications can see a huge impact on client satisfaction, according to the study. Full-service investors who interact with their advisor firm via a mobile app are more satisfied than those who don’t by a 40-percentage-point margin, according to previous research in the “J.D. Power 2020 U.S. Full-Service Investor Satisfaction Study.”
Broken down by firm, Chase’s mobile app enjoyed the most satisfaction among wealth management consumers, followed by Wells Fargo’s, E*Trade’s and U.S. Bank’s.
The “2020 U.S. Wealth Management Mobile App Satisfaction Study” collected responses from 2,724 full-service and self-directed wealth management firm customers, and was fielded in July and August, 2020.