Advisor360°’s new Connected Wealth Report: Client Edition examines the way in which mass affluent and high-net-worth (HNW) individuals engage with their financial advisors using technology. During the spring of 2023, the company surveyed 2,000 investors ages 20 through 83 who use a financial advisor and/or an insurance broker (“advisor”). Survey participants had at least $250,000 managed by their advisor, with $568,342 in assets on average.
While survey participants rely on technology to help facilitate a connection with their advisor, the majority do not want a do-it-yourself (DIY) experience. Eight in 10 (82%) say that their advisors offer a client portal and the majority of those who use the portal are happy with it (91%).
Real-time portfolio access was the top factor that determined whether a client’s experience using their advisor’s portal was positive. Of least importance? Access to educational content and market research. Only 10 percent considered this feature important for having their advisor’s technology meet expectations. The majority of those surveyed are satisfied with their ability to update their profiles online, move money, and share documents with their advisors.
“We wanted to better understand technology’s role in facilitating the advisor-client relationship from the client perspective,” said Rich Hart, Advisor360°’s Senior Vice President of Corporate Development. “Our survey confirmed that individuals who hire financial advisors want the professionals to do their jobs and are not interested in acting as their own investment managers. Although they want to be connected to their advisor and their assets, clients rely on their advisors to do the heavy lifting.”
All Generations Favor a Holistic View
Indeed, the number one way that mass affluent and HNW investors judge their advisor is by how well they help them achieve their financial goals. These individuals are largely willing to give their advisors a complete picture of their financial situations to do so. While 86 percent believe their advisors should have a comprehensive view of their total wealth profile—that is, assets, liabilities, investments, insurance, real estate, and bank accounts—only 40 percent say their advisors have this already.
Those most resistant to this level of information sharing are older baby boomers and seniors (ages 68–83). Twenty-two percent are unwilling to grant this type of access to their advisor, while an additional 34 percent would allow it with conditions and controls attached.
Conversely, older Gen Z and young millennials (ages 20–35) are the most willing to provide holistic access: 47 percent already do and an additional 21 percent would do so unconditionally if the opportunity arose. Only 11 percent would refuse to give their advisor that level of information access.
“It makes sense that the generations who are already sharing the most about their lives online would be the least likely to have issues providing their advisors a complete and comprehensive picture of their financial portfolios,” said Hart.
Clients Sound off on Advisor Tech
While meeting face-to-face is the preferred way to engage with one’s advisor, the survey revealed that technology is a key driver of these interactions. Advisors would be well-served by ensuring their clients have the right balance of high-tech and high-touch connections. Consider:
- More than three-fourths (76%) of respondents agree that mobile access to their financial portfolio increases engagement. Still, 11 percent said their advisor does not offer mobile account access.
- Three in 10 (31%) respondents do not know or care about what their advisor offers in terms of technology. The remaining 69 percent say they take full advantage of their advisor’s technology.
- More than half (52%) of older Gen Z and young millennials want the ability to text or chat online with their advisor, the highest of any generation.
Meeting the Tech Needs of the Inheritance Generations
The survey also revealed sharp differences in the ways older clients (ages 68+) use technology to engage with their advisors compared to those who stand to inherit wealth. The “inheritance generations” include the “inheritors” (ages 36–67) and the “future wealth holders” (ages 20–35). For example,
- More than half (52%) of older Gen Z and young milliennials—the future wealth holders—have changed or not hired an advisor because of poor technology, compared with 29 percent of inheritors and just 11 percent of older clients.
- Nearly a third (33%) of future wealth holders check their account balances online daily, more than double the 15 percent of older clients who do.
- The majority of future wealth holders (75%) and inheritors (70%) say they are fully versed in their advisors’ technology, compared to 58 percent of older clients who say this.
“Technology is changing the way that advisors connect with the inheritance generations, but it is not eliminating the need for strong interpersonal connections,” said Hart. “If anything, technology is revealing the gaps in their clients’ wealth experience. It is up to advisors to provide ways to facilitate a more meaningful and collaborative financial planning experience for clients of all ages.”
To learn more about the technology needs of the inheritance generations, pre-register to receive Advisor360°’s 2023 Connected Wealth Report: Client Edition.