Digital investing tools are changing the way in which financial advisors connect with investors, potentially impacting how investors use their advisors in the future.
A recent Accenture report found that investors value digital financial planning tools that offer investment education, advanced planning and scenario analysis.
This suggests that wealth management firms which provide these tools and alter their business models to serve both traditional and autonomous investors will come out on top.
The survey states that 27% of investors have switched firms to receive a new digital tool or service. Additionally, it is shown that digital tools which offer education on long-term goals, retirement planning, estate planning, auto asset allocation and 360-degree account views are considered to be "difference makers", which could drive an investor’s decision on which firm to select.
Of the nigh-net-worth investors that were surveyed, 25% said that they would consider switching their institution if they did not receive a desired online tool or service.
Owen Jelf, global managing director of Accenture’s Capital Markets practice, said: "Investors are relying more heavily on digital tools to help them better understand investment trends, decisions and potential outcomes."
"European wealth management firms have tended to be more reluctant to bring digital tools into their service offerings, focusing their efforts instead on helping to build personal relationships."
"Our research shows that firms that integrate digital tools into their business models will help strengthen these relationships rather than threaten them, and in fact help them attract the most lucrative investors."
The report shows that the digital tools which investors are most interested in are those that reduce costs and transaction feed (60%), those that improve access to their account (50%) and those which improve access to their advisors (32). This underlines the clients demand for a blend of digital and advisor support tools.
The relationship between middle- and high-income, digitally savvy, European investors and their advisors is becoming closer, mainly due to an increasing comfortableness of investors conducting their own research, rather than an advisor creating an investment portfolio.
Alfredo Avila, managing director for Accenture Wealth and Asset Management Services in Europe, Africa, Middle East and Latin America, said: "European investors are becoming more autonomous and increasingly working with their advisors in an unconventional way – using them as counselors to run investment plans by, rather than as investment managers."
"Firms need to embrace the changing relationship model and empower their advisors with digital education and financial-planning tools that add value and enhance the overall investment experience. These tools will not replace the role of the advisor, but rather help investors understand the advice they are being given and increase their level of trust."
The majority of investors (71%) prefer face-to-face meetings with financial advisors and many (68%) do not agree that a digital-only relation with their advisor would be effective.
The online survey from Accenture spanned 1,200 respondents from middle and high income, tech-savvy investors located in the UK and across Europe.
