The Digital Wealth Readiness Checklist

Post image for The Digital Wealth Readiness Checklist

by PwC AM on March 17, 2014

By Justin Kaufman, Asset Management Partner

There I sat not long ago at LaGuardia Airport again for what seemed like a weekly occurrence this past winter: reports of yet another storm on its way to add several more inches to the thick layer of snow already on the ground.  And the main question I mulled over as I headed back to Pittsburgh is how I could effectively interact, connect and engage with my New York- and Washington DC-based client teams virtually for the next three days.

And then it occurred to me that my current predicament wasn’t too different from one many of the clients I speak with are in. My clients are wealth management firms of all types – different sizes, geographies, client segments, business models. Regardless of their focus, much like the storms I encountered this winter, all of them are facing increasingly frequent and disruptive forces – whether that’s the growing waves of retirees here in the US or the  large looming transfer of assets across generations. And much like my need to effectively engage with teams, they also are facing the increasingly challenging task in a multi-channel world of connecting with clients, advisors, and even internal stakeholders in meaningful ways.

Many of the conversations we have with clients focus on the role of digital and specifically, social media technologies, in creating this connected experience.  Much of which is summarized in a viewpoint that my colleague Arjun Patel and I recently published called The Connected Advisor, The Rise of Digital and Social Advice in Wealth Management.  Clearly social media and social technologies in wealth management are in their infancy. Equally clear is that most firms recognize that they represent a potentially hugely disruptive force that will only grow in strength but struggle to understand how to realize the potential or manage the risks. To that end, the following is a handy five-point checklist to make sure your organization is ready to operate at the frontier of the emerging digital wealth revolution.

1. Tie social pursuits to highest-value business opportunities (not what fits with the tools)

Evidence of a rapidly growing gap between client, advisor, and internal stakeholder expectations and service delivered in the industry is increasing, and requires knowledge of client preferences to close. So the right social strategy for your organization starts with a close examination of the client or advisor segment (or stakeholder segment). The next step is to identify the opportunities that are highest value along the lifecycles of these clients, advisors or stakeholders where social technologies can be deployed.

In doing so it’s important that wealth managers think broadly and draw inspiration from leading practices not only within wealth but also from other industries that market to the same client base. Indeed customer expectations are being set by such experiences and in a constantly shifting landscape, it’s possible that tomorrow’s innovations can come from new emerging entrants or complementary industries, rather than from traditional financial services firms.

2. Select and align technologies and tools to the future (not just the present)

Once you’ve identified the pursuits you’re looking to advance, align your investments to the leading tools and technologies which should ultimately allow you to reach your defined objectives.  PwC’s recent Asset Management 2020 study found that 40% of asset managers don’t do anything related to social media beyond operating a website. Analytics and big data tools like social listening can enable wealth managers to identify client needs as they emerge and incorporate them into service and product strategies.   The mandate is not just about investing in technology for today but also investing strategically in areas that align with your overall business strategy tomorrow.

3. Put risk and compliance checks in place up-front (and educate over and over again)

Many firms that I speak to struggle to get their arms around the risk and compliance question. Each news report of missteps by a firm on social media further fuels the apprehension.  And even the obvious first step of defining the appropriate policies and procedures and enabling that necessary training is implemented  can be daunting given the potentially large number of advisors, teams and stakeholders engaged in social media at most wealth managers. However, in practice, most social efforts that succeed start small and grow in waves. Engaging risk and compliance stakeholders in these early stages with tight, well-defined governance (at the risk of less value up-front) initially allows everyone to get comfortable with managing social in the same manner as other client, advisor and stakeholder channels. So if that means approving every post before they are posted, when you get started, so be it. But be warned, the education process can be an ongoing one.  The risk of not entering social is starting to outweigh the risk of not doing anything at all – so as they say, dip your toe in the water.

4. Spend most of your time on change management and stakeholder adoption (if you build it they will not come)

Too often organizations adopt an ‘if we build it, they will come approach’ to user adoption when it comes to social technologies, citing examples of popular social media site user adoption. What these approaches fail to consider is the education required to shift habits and behaviors that are often entrenched in organizations over many years. So while the value of getting sales associates and operations teams to use social collaboration tools with their counterparts across the globe or even on a different floor of the same office to deliver more efficient client service may be obvious, driving adoption and new behaviors is anything but. Efforts that are business-sponsored (not exclusively driven by technology) and have loud senior stakeholder support are the ones that are most likely to succeed. Unfortunately, the amount of change management (articulating business cases, defining use cases, sharing success stories) required to drive adoption is often times underestimated and underinvested in, causing well identified and aligned pursuits to fall short of capturing their full value.

5. Embed digital and social into the organizational way of life (complete the loop)

Once advisors, their sales teams and other stakeholders have begun to adopt digital, it’s time to embed digital and social into the organization’s way of life and let the organization know you’re serious about your business strategy.  Sharing success stories are an effective way to help advisors understand the revenue and business potential of a digital and or social strategy.  It’s important to also foster communities where stakeholders collaborate towards common goals to create value for all involved.

While the future may be hard to predict, it’s important to prepare for change.  As noted in PwC’s 2014 US CEO Survey, “Digital means different things to different companies. Discern which technologies will have the biggest impact on your business. Look beyond your industry and embrace experimentation.”

Print Friendly, PDF & Email

Previous post:

Next post: