Michael Foy of J.D. Power Explores How the Wealth Management Sector Can Integrate Human and Technological Touch Points to Maximize Customer Experience
"Technology is not an end unto itself and it shouldn't develop in isolation. It has to be woven into the overall customer experience. Someone at the senior level has to have oversight into the entire customer experience, including, but not limited to digital capabilities." -- Michael Foy, J.D. Power
Digital transformation is changing the way that people buy, get information and invest. Though wealth management is a relative latecomer to digital transformation, today's wealth management companies and their customers are now relying increasingly on digital processes to purchase wealth management services -- as well as for some basic investment advice, says Michael Foy, Senior Director, Wealth Management Practice J.D. Power, in a new interview for journalists.
"While the trend toward automated transactions and basic investment advice has resulted in downward pressure on fees, digital transformation forces in the industry are also providing wealth management firms with the ability to improve the customer experience," he says.
The key, he says, is to determine how best to integrate technology with the right opportunities to introduce the human touch.
"Some tasks traditionally performed by the advisor, such as portfolio rebalancing and account allocation, are rapidly being automated. However, in other areas technology is empowering advisors to add more value to clients. For example, by leveraging Big Data and enhanced analytics tools advisors are able to more effectively anticipate their clients' needs based on patterns with relevantly similar clients," he says.
Better Insight, Better Advice
The wealth of information that clients are willing to share -- if the right level of trust is established -- can provide a life-time of context that can drive long-term relationships. Properly managed and governed, the data provides wealth management advisers with deep insight that can help clients appropriately adjust their financial lives as they move through the different life stages -- from funding college to preparing for and living in retirement.
"Technology is not an end unto itself and it shouldn't develop in isolation. It has to be woven into the overall customer experience," Foy says. "Someone at the senior level has to have oversight into the entire customer experience, including, but not limited to digital capabilities."
Digital connections with clients can provide a continuous feedback loop that will become increasingly essential in meeting the needs of today's omnichannel customers. This feedback enables wealth management firms to react quickly as client needs and expectations evolve.
The transformation process can be daunting; this is especially true for wealth management firms that are relatively new in their digital journeys. Over the last 18 months, J.D. Power has augmented its long history of data gathering and data analysis across industries with digital expertise in the wealth management arena to help firms and financial advisors fill in the gaps in their own digital capabilities.
"We are providing valuable guidance on the measurement systems needed to provide actionable customer feedback about usage, value and customer engagement," he explains.