A digital revolution in wealth management

In the summer, SapientNitro and Fidelity Worldwide Investment launched an iPad app for all investors. The move signals a cultural shift in how wealth management is embracing digital innovation for the benefit of the customer experience. SapientNitro’s client services director, Bradley Gamage and Fidelity Worldwide Investment’s head of digital, Ian Hood explain

Wealth management is a digital frontier that’s been slow to keep pace with innovation. Financial institutions that have historically based their business models on being an intermediary have had little reason to move away from working practices to explore digital disruption. However, a host of recent regulatory changes, along with consolidation and an overall reduction in the amount of independent financial advisors, as well as new challenger brands offering personalised online services while encroaching on the domain of the traditional investment houses, has meant that a 4,000 year old industry is now having to refocus on the customer and in particular, their online digital experience.

Consolidation over the past three years has seen Aberdeen Asset Management acquire Scottish Widows Investment Partnership from Lloyds Banking Group for £550 million and Standard Life Investments pay £390 million for Ignis Asset Management. Schroders Asset Management acquired a significant stake in Nutmeg in 2014 and Dutch bank Rabobank, meanwhile, sold 90 per cent of its asset management arm Robeco to Japanese financial services group Orix for €1.9 billion.

Much of the recent consolidation has been fuelled by new regulation such as the Retail Distribution Review, which came in on 1 January 2013 and required the sector to change how it charges clients, in order to remove the risk of advisers suggesting products that earn them the most commission, regardless of suitability. In other words, it has become harder for the smaller wealth management businesses to thrive and be disruptive as newcomers have taken advantage of the emerging vacuum by ploughing the digital landscape to create a new way to service financial investors.

Fidelity’s recently launched iPad app is recognition that digital disruption cannot be ignored as consumers demand truly personalised investment information alongside the latest finance news and insights from global experts. SapientNitro worked in partnership with Fidelity to provide mobile users with intuitive and relevant content, while allowing them to check different accounts and monitor funds, all from one digital space.

The app needed to provide an immersive experience to better connect the brand’s heritage with today’s digitally empowered investors by giving them greater control over their finances. If consumers aren’t able to consume in the way they want, it is now too easy for them to take their investments elsewhere, so the digital customer experience has risen to the top of the agenda.

Together, Fidelity and SapientNitro created an app to provide credible guidance to investors, giving them the tools and information they need to manage their finances on their own terms. This is vital and forms only the first phase of a three-year digital evolution that will see Fidelity customers receive a more personalised and responsive omnichannel digital service.

In any sector, however, a digital evolution requires carefully choreographed change management from within so that company culture isn’t threatened and fund managers understand the benefits to a different way of working. At Fidelity, incremental change management is integral to the digital strategy and it’s helping the company as a whole to become more agile and able to put digital first.

In the longer term, the wealth management sector will grow to understand more about its customers through data profiling and advanced tracking of the customer journey across devices and platforms. As the industry joins other financial institutions in finding news to understand its customer base and deliver on rich consumer experiences through digital innovation, the result will be positive news for investors and the popularity of investing will continue to grow at pace.

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