Welcome to the world of Google Wealth

Ask any wealth manager who their future competitors will be and they will probably say one of the big-name private banking brands or a local boutique offering similar products and services to their own. They may mention an emerging robo-adviser with DIY investment tools or a professional services organisation with a wealth advisory proposition. Few would say Google. And yet from the client perspective, a search engine could be the future market leader in wealth. 

In a recent survey Scorpio conducted with technology solutions provider FactSet, Google was deemed by high net worth individuals (HNWIs) to have the most exciting potential as a wealth management service. From the client perspective, Google embodies a good corporate culture; one that gives ultimate control to the user, is geared to provide transparency and facilitates efficient information management and delivery. 

Information culture

HNWIs believe so much in developing an information culture in wealth that they think all parts of the industry should be geared to support it. They assert that industry regulators should be expediting transparency by ensuring firms have appropriate technology, can demonstrate client suitability and prove their investment process. 

This is so important that many judge the credentials of their wealth management partners based on the information they provide; for investors with wealth levels surpassing $10m, the quality of the investment insight they receive is the most important evidence point of a secure organisation. 

Data deficit

But it appears many wealth management firms could currently be falling short when it comes to providing the information culture which clients crave. 

Clients expect ongoing information management – particularly when it comes to personal data. A majority of clients want their money managers to be providing evaluations on their risk profile on at least a monthly basis. Younger clients want these more frequently still, with 30 per cent of those under the age of 35 demanding weekly assessments and 16 per cent a daily review.

Three in every five millennial investors also claim they expect their wealth management firms to be screening, managing and allocating their investments in a socially responsible manner, requiring them to have a full line of sight into the environmental, social and governance (ESG) credentials of their securities. Clearly, effective information flow between firm and client is important so that clients can manage their own social credentials too. 

Despite this desire for data, most operators are communicating with clients on a monthly basis, regardless of whether they are discussing sensitive issues – such as risks and restrictions, updates on securities and portfolio valuations – or more general information such as market reviews. Many too have not implemented robust systems to effectively screen investments according to ESG factors. 

So beware the age of information and take heed that HNWIs are increasingly demanding greater levels of transparency about the how, the why and the what of wealth management: they want to see in clear detail how their wealth is being managed, why their investments match their particular profile and what exactly their investments consist of. 

And if you need any further inspiration on how to deliver this, simply search for Google. 

Annie Catchpole is senior manager at wealth management think-tank Scorpio Partnership