Mobile apps are now consumers’ preferred way to engage with many of the companies and services they use — but not wealth management customers.
Utilization of wealth management apps is among the lowest of all industries, according to a J.D. Power study evaluating apps from 15 of the largest brokerage firms. Only about a quarter of clients use their firm’s mobile apps, whether they are self-directed investors or in a full-service relationship with an adviser.
That’s significantly less than the more than 50% of bank customers who use their bank’s mobile app, and the more than a third of credit card customers who use their credit card company’s app.
One obvious reason for the disparity is that wealth management clients tend to be older and rely more on personal contact with their adviser, said Michael Foy, J.D. Power senior director of wealth and lending intelligence.
But the industry isn’t doing itself any favors, either. Investors criticized wealth management apps for being too text-heavy, lacking visuals and having an overall look and feel that is dated. Basic tasks like reviewing a portfolio, researching investment options, checking performance and transferring funds are often challenging.
High-net-worth individuals in particular rated wealth management apps low for their navigation and available services, especially when compared to banking and credit card apps, which received high marks in consumer satisfaction in addition to their high adoption rates.
“Those two are related to each other,” Mr. Foy said. “They are struggling to navigate through apps to get to the services they want to perform.”
A general concern about data security is another factor keeping clients from using mobile apps to manage some of their most sensitive financial information. Forty-five percent of clients gave their app a failing grade on cybersecurity.
Interestingly, investors who work with an adviser tended to be more satisfied with a firm’s apps than investors who did not. Mr. Foy suggested this could be the result of different expectations.
“If I have an adviser that I’m really happy with that is doing a lot for me, the needs or expectations I have in terms of the digital experience will probably be less than a person who is actively involved in managing their portfolio,” he said.
That doesn’t mean firms should abandon their mobile apps. Across industries, a positive mobile experience tends to correlate with higher consumer satisfaction and engagement, Mr. Foy said.
Firms also need to keep in mind the next generation of investors, who are more digitally savvy and will demand a user experience in line with what they get from banks.
“There’s also a benefit in terms of giving people the ability to access information, tools and resources on demand that really limits the need to go to an adviser or adviser team for basic, maintenance-type of needs,” Mr. Foy added. “[Apps] allow advisers to be focusing more of their time on doings thing that really add value — meeting with clients, meeting with prospects and helping their clients develop and achieve their goals.”