Advisors Want Seamless Digital Experience With Asset Managers: J.D. Power

Wealth managers have spent the past several years rejiggering and transforming their operations for digital-first methods of client communication, investment strategy development and trade execution.

Now, they want one main thing from their digital engagement with asset managers, according to a recent study by J.D. Power: an easy experience. Next to investment returns, advisors look for ease of doing business when they choose asset managers they most frequently work with.

“Returns will always be important, but when enhancing brand perceptions and differentiating in a hypercompetitive group of asset managers who are all subject to the same macro market conditions, ease of doing business and seamless interaction between digital and traditional channels is the key,” Craig Martin, head of wealth intelligence at J.D. Power, said in a statement.

Related to this, Martin said, is that the average number of asset managers that advisors used this year fell to seven after holding steady at eight for the past three years.

“As advisors consolidate their asset manager relationships,” he said, “they are increasingly investing with those who make it easiest for them to do so.”

The 2024 study evaluates financial advisors’ interaction with asset manager websites as part of their efforts to help clients grow and manage their wealth with optimal investment products. Fielded in June through August, it is based on 2,329 advisor evaluations of four factors: speed, information/content, visual appeal and navigation.

Key Study Findings 

Although advisors say the main reason they use an asset manager is returns, they also look for what else the relationship offers. Remove returns from the equation, and 37% of advisors said the most important variable influencing their selection of a particular asset manager is ease of doing business.

Among advisors who said they have an excellent digital experience with asset managers, 26% selected them based on ease of doing business. Among advisors who have a poor digital experience, just 18% chose their asset managers based on ease of doing business.

Less than 7% of advisors said they prefer to rely on a single engagement channel when working with asset managers. Instead, they prefer a multichannel mix:

• Phone/video calls: 73%
• Email: 70%
• Digital websites and apps: 56%
• In-person visits: 55%
  

What is particularly noteworthy, J.D. Power said, is that advisors who use an asset manager’s mobile app are most likely to work with that asset manager based on ease of doing business.

Wholesaler representatives responsible for managing advisor relationships are not doing enough to nurture digital adoption among advisors, according to the study. Thirty-seven percent of advisors said they receive no support or guidance on using asset manager websites or apps from their wholesalers or representatives.

This results in dramatically lower satisfaction with digital capabilities, J.D. Power found.