Keep it simple, stupid. The KISS acronym, while direct, is on point when dealing with investor behavior in an effort to increase the advisor’s business.
Cerulli Associates finds (unsurprisingly) that a simplified, streamlined user experience is key to converting interest into assets.
Overall, 49% of affluent market respondents indicate that they would prefer to use a single institution to serve the bulk of their financial needs.
This preference is strongest among investors under age 30 (66%), before tapering off lightly among older cohorts but stabilizing at approximately 46% for respondents over age 50, according to the global research and consulting firm.
However, investors’ stated desire to consolidate their finances is outweighed by their lack of action.
Onboarding
A complicated on-boarding process is to blame, which Cerulli calls a “deal-breaker” for many investors who lack the time and the attention to consolidate with a single institution.
“While the idea is appealing, the steps needed to get there are not. Creating a path of least resistance is crucial for wallet share growth,” Scott Smith, director of advice relationships at Cerulli, said in a statement. “Providers committed to growing wallet share should explore how they can use technology to complement asset transition specialists to help shepherd investors through this process.”
Overall, 27% of affluent respondents indicate that the ease and convenience of doing business is their reason for wanting to centralize assets with one financial provider.
To strengthen their client relationships in the future, financial platform providers will not only have to develop digital applications that interest clients and prospects, but will also need to assure that they are being used frequently and effectively.
“Cool but unused tools are just expensive ornaments, not value creators. In addition to their normal quality control tests, developers should include extensive product usability demos by testers across age cohorts,” Smith adds.
Regardless of their ultimate strengths and weaknesses, how a firm is thought of by investors will drive future client acquisition. While quality and ease of use are highly subjective, they are major initiatives at most providers.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
