An overwhelming majority (80 per cent) of wealth managers are concerned that their firm’s technology not good enough to keep up with the demands of the next generation of investors, according to a new report.

A survey of 47 UK investment businesses, and 1,019 investors, by digital financial platform provider InvestCloud, found that 68 per cent of wealth managers said they knew that improvements to their digital technology would be necessary for survival.

One in five of the investment management businesses surveyed believed its digital propositions are good enough for modern investors. A similar number (19 per cent) describe them as poor.

Nearly half currently use mobile apps to manage their investments, with InvestCloud predicting that usage will increase. The survey also showed that despite 48 per cent of investors saying they consider a firm’s digital proposition as one of the determining factors in selecting a wealth manager, a large number of firms are lagging behind their FinTech competitors on mobile offerings.

InvestCloud said the survey results were “resoundingly clear” in finding that engagement with new investors both online and on mobile is “mission critical” for investment firms hoping to capture the next generation of investors.

The report read: “The loyalty that once bound investors and their managers is now under threat from this growing affinity with technology.”

An Accenture survey of more than 33,000 consumers showed that 78 per cent would welcome investment services from a robo adviser and that 38 per cent would just as readily take advice from Google, Amazon or Facebook.

John Wise, co-founder and chief executive of InvestCloud, said: “The investment management industry is facing a digital crisis – those firms who successfully manage this digital transition will gain access to a lucrative, multi-trillion-dollar market as wealth transfers to younger generations.

“Failure to go digital will cause them to lose out to digital advice startups and big tech firms making an entrance into the sector, which already have strong knowledge of user experience, design and digital.”

Recent FStech analysis suggested the asset management industry is increasingly turning to technology for efficiencies enabling fee reduction and accessing the next generation of investors, following cost and communication criticism from the regulator.

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