Wealth managers vulnerable to digital innovation from FinTech incomers

Wealth management is one of the least tech-literate sectors of the financial services industry, and is falling well behind non-financial services industries, according to a new report by PwC.

What wealth managers offer is sharply at odds with what their clients, high-net-worth individuals (HNWIs), expect.

PwC's report reveals that only one-quarter of wealth managers offer digital channels beyond e-mail.

"With a client-base that feels only weak affiliation to its chosen providers, the sector is now acutely vulnerable to digital innovation from FinTech incomers, including robo-advice services, which may be able to offer a broader range of products and services," says Antoinette Hoon, private banking advisory services partner at PwC Hong Kong.

"If firms do not respond now, they simply will not survive in the medium to long term." The report finds that 69 per cent of HNWIs globally and 77 per cent in Asia-Pacific use online/mobile banking, and more than 40 per cent of respondents go online to review their portfolio or the markets. More than one in three are already using online services for portfolio management.

Over half of HNWIs surveyed globally (55 per cent) and nearly two-thirds in APAC (62 per cent) believe it is important for their financial adviser or wealth manager to have a strong digital offering - a proportion that rises to almost two-thirds (64 per cent) among those under 45. Yet, some firms rate themselves as digitally sophisticated, when the only service offered to clients is a website.