Investors becoming less loyal clients

A study from EY reveals that four of ten clients are willing to switch their asset manager and investment advisor. Thereby, revenues of 200 billion USD could be moved to asset managers that position themselves best - especially regarding digital services.

Investors demand a combination of low fees, improved returns and a wide product and service portfolio from asset managers. While EY shows that such demands a not new, they have changed: Clients are increasingly demanding an improvement regarding IT, digitalisation and multi-channel services, says the study. Because 60 percent of respondents said that they require more information digitally, established asset managers are concentrating on digitalising their offers and modernising their IT infrastructure. However, the existing systems, bureaucracy and regulatory hurdles are slowing down such processes.

The study reveals the necessity of improvements especially in three areas:

  • Transparency: Clients are demanding a straightforward and open communication about fees and costs, want to see independent and open evaluations of managers and exchange themselves with other clients.
  • Advisory channels: Advisors and asset managers are still too reliant on personal interaction. Instead, the EY study identifies a need to become open to expanding digital channels.
  • Role of the advisor: While simple advisory and management functions are outsourced to automated systems, advisors are expected to help achieving set financial goals and react to changing circumstances.

For the EY Global Wealth Management Report 2016, Oxford Economics has asked 2000 private investors on behalf of EY. The survey was pursued online at the end of 2016 while EY has also pursued interview with 60 executives of international asset management companies.