The wealth management industry is facing significant challenges in meeting clients’ growing technological expectations. A recent study by Avaloq, a digital banking and wealth management technology provider, found that 25% of investors worldwide are considering leaving wealth managers who fail to modernize and adopt new technologies. The study surveyed 300 wealth managers and over 3,000 investors across Europe, Asia, and the Middle East.

It revealed that 63% of investors value being shown in-person how their investment decisions impact their portfolio, while 66% see access to investment analytics and portfolio visualization as essential for building confidence with their advisors. However, many wealth managers are struggling with outdated and inappropriate technological systems. The study found that 44% of respondents described their systems as outdated, and 31% stated they were inappropriate for their needs.

As a result, 37% of wealth managers worldwide do not use investment advisory technology during client meetings. The gap between investor expectations and wealth management practices is even more pronounced in the United Kingdom.

Wealth management technology challenges

UK investors rely more on technology to foster trust with their wealth managers, with 72% valuing the ability to see investment data and the impact of their decisions in real time. Despite this, half of UK wealth managers do not use investment advisory technology with clients. Suman Rao, UK Managing Director at Avaloq, stated, “Our research reveals that while wealth managers are under increasing pressure from clients to incorporate technology into their offerings, many are struggling to keep up.

Complex, outdated, and poorly integrated technology systems are a significant hurdle.”

Rao emphasized that technology providers must deliver the necessary analytics, automation, and visualization tools for wealth managers and clients. For wealth managers to stay relevant and competitive, seamlessly integrated and user-friendly technology platforms are essential to meeting investors’ evolving expectations. As the wealth management industry continues to evolve, firms that embrace new technologies and prioritize digital strategies are seeing higher revenues and gaining a competitive advantage.

Netwealth’s 2024 AdviceTech report found that 23% of advice firms fall into the top cohort of technology adoption, with 81% reporting more than $1 million in revenue for the year ending 30 June 2024. These top technology adopters also leverage artificial intelligence (AI) in various aspects of their business, such as summarizing client meetings, content marketing, back-office automation, and preparing financial plans. As the financial advisory sector evolves, integrating advanced technologies and solid digital strategies remain key drivers for success.

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Wealth managers struggle to meet tech demands

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