By John Prendergast. This article was originally published on Advisor Perspectives on July 26, 2023.
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Wealth managers must understand their clients’ online behavior. Though we know them in some ways, we cannot assume their online behavior mimics what we know about them from past interactions.
Over four billion people own smartphones and access the internet. The pandemic accelerated the shift toward digital interaction. Of those 70 and older, 72% use online banking, and Grandma has even joined TikTok. Wealth management clients prefer remote meetings. This all feels very different from the “my clients aren’t online” paradigm pre-pandemic. To navigate this new era, pay attention to not only your clients’ individual behavior but the broader world in which they operate.
The emergence of the engagement economy
As people interacted more online, they began to judge the quality of their services and experiences based on their engagement. The result is the “engagement economy” we inhabit. Economic value, client satisfaction, and company growth are all inextricably tied to client engagement. The COVID-19 pandemic accelerated this shift in every economic sector, especially in wealth management, as clients demanded more virtual interactions and customized experiences from their advisors.
While traditional in-person engagement is still critical, it alone is no longer enough to meet clients’ expectations. To succeed, traditional relationships must be supplemented with strong digital engagement. This combination is the only way to continue to drive client loyalty and long-term relationships advisors have become accustomed to.
Wealth managers and client engagement
Clients expect to have constant access to their financial data as well as up-to-date insights and advice. They want the convenience of mobile apps and the confidence that comes with personalized and timely responses to their inquiries.
Engaged clients are happier, more focused on the long term, and less likely to panic in difficult market circumstances. Traditional engagements like phone calls and meetings aren’t enough. Businesses have to think holistically and design their client experiences around engagement.
The elements of engaging experiences
What do Netflix, Facebook, and The New York Times have in common? If you study what successful digital media companies do, as I have, you will discover a pattern that they all share that drives their high engagement. That pattern is built on two key design elements: beauty and obviousness, and two key structural elements: frequent personalized messaging and multiple channels.
Design
- Beauty – visual appeal draws clients in and creates positive feelings, which are the foundation of engaging experiences.
- Obviousness – delivers a design that is self-explanatory to everyone, eliminating the need to learn anything explicitly to use it.
Structure
- Frequent personalized messaging – Engaging experiences are not passive. They reach out and entice users to connect with personally relevant content. The best deliver value directly through their outreach, making messaging an engagement of its own.
- Multiple channels – Are you a mobile user or do you prefer the web? The answer for everyone is “It depends” – What time of day? What am I doing? What is my context? Our preferences for channels shift from moment to moment. Engaging digital experiences must be omnipresent and easily shift across channels to eliminate any friction at the moment.
Engagement loops
With all the above elements in place, the result is an engagement loop. Loops are when one part of the experience leads to another. For instance, an email triggers you to log onto the web, or a mobile alert connects you to content on your phone. This is the pattern major digital media companies follow. Think about being alerted to a movie on your phone to pay for a rental on your desktop, and then streaming it via a service on your TV. Each engagement drives usage and places the brand at the top of clients’ minds. That vastly improved awareness and sense of value received is the true power of a high-engagement loop.
Wealth managers should emulate the major digital-media companies and engage clients with their digital-client experience. This is the world clients live in today. It is what they expect. Advisory firms that have implemented this playbook are growing faster, delivering higher client satisfaction, and lowering their operating costs.
John Prendergast is CEO and co-founder of Blueleaf, a leading all-in-one platform for RIAs and broker-dealers to deliver exceptional advisor and client experiences while simplifying operations. John also co-hosts The Augmented Advisor podcast, featuring industry leaders sharing tools and insights to succeed in a digital world.
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