However, among the ultra-high-net-worth segment, 61% said that they would seek ESG investment advice, and many (46%) reported moving large proportions of their assets to find a firm with a culture more aligned with their social value over the course of the last year.
“We feel like this did accelerate during the pandemic,” said Bailey. “My perspective is that people now have a lot more time to think about the impacts they have on the people around them and the environment they are living in. They also ended up with more time to research ESG issues, and at the same time, mainstream organizations in the financial industry are continuing to write about and educate on ESG.”
Myth Three: It’s All About The Personal Relationship
Refinitiv’s third myth is perhaps the most shocking: For decades, the wealth management industry has seen itself as built through personal relationships between advisors and their clients, often sealed with a handshake, with technology as a relatively less important factor.
However, Refinitiv’s research found a plurality of investors, 49%, naming digital experience as the most important criteria they consider when selecting firms—making technology the most often named element in the study, ranking ahead of ethical business practices (48%), active management products (48%) and tax-efficient products (48%).
“This requires firms to think about how they will build trust in a different way,” said Bailey. “When we think about the digital experience, most banking transactions now happen online. People interact with their retirement accounts online. I don’t believe interpersonal connections will ever go away, but it’s become more important to start to build trust through digital interactions and then find ways to seal the business relationship with a personal relationship that is build on the client’s story. Clients want their whole business, from banking to insurance, and their whole financial life in one place, and they can then engage with advisors at a different level that relates to who they are and where they want to be.”
In other words, investors aren’t loyal to a firm because of its brand or the charming personality of its advisors—they want a great experience.
Yet just 18% of investors say they are satisfied with the digital experience offered by their wealth management provider.
Still, the chief reason investors change wealth management firms is performance, not technology or access to ESG investing, according to the study.
“The biggest impact we’re going to have on the wealth management space is if we’re all willing to step back and eliminate our preconceived ideas and look more thoughtfully at what we can do to better help the end investor,” said Bailey.
For the study, Refinitiv tabbed research firm ThoughtLab to survey 2,325 investors and 500 wealth and asset management firms across three regions and fifteen countries.