HNW investors want fully digital portfolios
High net worth (HNW) investors appreciate increasing access to digital platforms, with more than half wanting an ability to manage their whole investment portfolio through a single digital experience, according to research.
The research, conducted by Investment Trends’ and commissioned by Praemium, found that ultra HNWs were the most likely to be of this view.
Despite having access to a growing set of options for digitally tracking their portfolio performance, only 11% of HNW investors had access to an online digital portal and around 6% a smart device app or investment platform (6%).
At the same time, nearly 40% did not believe a digital experience is important, however according to the study this might have been due to a lack of understanding of the benefits as over 50% tracked their portfolio performance manually using a spreadsheet and a quarter look at each investment separately, unable to gain the benefit of a true picture of their total wealth.
The requirements for a digital service varied slightly based on the level of investable assets, with the emerging HNW investor (those with $1 million to $2.5 million in investable assets) desired improvements to a digital service included assistance with tax reporting, scenario testing, automated reporting, and a more user-friendly interface.
For the ultra HNWs, greater customisation and improved customer service via email and online chat were desired improvements to a digital service than switch to a new portal.
The firm said the results of the research mirrored a study into how advisers managed and reported on their clients’ wealth that Praemium undertook in 2020 with Investment Trends, which showed that advisers themselves were managing multiple systems and spreadsheets to provide total wealth reporting for clients. This meant spending an additional two hours per client and they believed that it was not possible to deliver a total wealth picture via a single platform.
Praemium’s chief commercial officer, Mat Walker, said: “The growing need for a digital experience is becoming increasingly important to investors.
“However, for both investors and advisers alike there is a lack of awareness around a platform’s ability to offer a digital experience that provides a single view of an investor’s total wealth portfolio.
“The HNW market is $2.77 trillion in size and Praemium administers and/or provides consolidated reporting on around 9% of that.”
Separately, the research found that just under 30% of HNW investors still did not use an adviser, which showed the digital experience and total reporting was a way for advisers to attract these clients and demonstrate the value of their advice service.
Recommended for you
Sharing his reasoning in joining the FSC board, WT Financial chief executive, Keith Cullen, believes “product and advice cannot be separated” from each other in the current environment.
The Emerge Foundation, a charity run by financial advisers and fund managers, has announced a scholarship program to help veterans transition into tertiary education.
In an open letter, Sequoia chief executive Garry Crole has hit out against shareholders “with a personal axe to grind” as he fights for his job ahead of an EGM.
The JAWG has announced it is in talks with Treasury around five “core principles” to strengthen the education standards for new entrants to the financial advice space.
