Wealth management firms have improved the most among luxury brand industries in building personal connections with clients, but they are missing out on “brand love” and loyalty by not exploiting the benefits of digital technology, according to findings from a new global survey.

The Futurewealth Report: The Digital Future of Client Relationships is the last in a four-part series of the Futurewealth Project, published jointly by SEI, Scorpio Partnership and Standard Chartered Private Bank. A total of 3,477 individuals with an average $1.9 million in net worth took part.

Despite leading the way in establishing face-to-face personal connections (up 7.2 per cent over the past year), banks and financial firms ranked much lower on the “Brand Love Index”, which is based on 16 firms and looks at what inspires up-and-coming wealthy clients. With respective scores of 88, 86 and 82 out of 100, luxury car, retail and travel brands topped the index, while banks and financial firms were given a less sparkling score of 71. 

“When those interactions were solely face-to-face, the industry was very successful, but digital communication is changing the game,” said Kevin Crowe, head of solutions at SEI Advisor Network. “It is vital for financial advisors to connect with clients and prospects through both digital and traditional mediums in order to become a more influential and valued provider.”

The report also asked for respondents’ opinions of 16 elite global firms, which it said are renowned for their approaches to digital marketing in their industries. Among those with over $4 million in net worth, it was found that online tools are nearly as influential as individuals' previous experiences with a financial services firm when it comes to buying a service or product.

For example, while the “up-and-coming” wealthy segment gave past experience a score of 7.4 out of 10, this was closely followed by: website, ratings and reviews (7.1); online marketplace (6.9); search engines (6.8); and social networking (6.7). Overall, the future-wealthy clients of banks attribute a weighting of 5 to the influence of online information in their investment decisions, compared to 6.8 for their previous experiences with the bank.

Although these findings suggest this segment is more likely to rely on their past experience with a bank and less on other channels when making their decisions, they also reinforce the need for firms to recognise and invest in what ultimately drives wealthy individuals to select and commit to certain brands.

The report acknowledges, however, that some banks may point to factors such as regulation as barriers to building the digital relationships they would like with their top clients. “However, by focusing on what cannot be done, these firms are running a serious risk of missing out on what can,” the report said.

According to Chad Bockius, chief executive at US-based Socialware, while compliance-related fears may be somewhat justified, they are overblown. Bockius believes that some firms are hiding behind compliance concerns in an effort to avoid dealing with the issue of social networking at all. However, prohibiting social networking can lead to serious problems, he said. “A state of prohibition puts you at more risk because financial advisors will do it anyway.” These views were laid out in the report, Reaching Out To The High Net Worth – Branding & Marketing Strategy Within the Private Wealth Management Industry, produced by ClearView Financial Media (publisher of WealthBriefing), in conjunction with Coutts.

“Based on the collective findings of all four of the Futurewealth reports, it’s obvious the banking and wealth management industry is making strides in using technology and digital communications, but not yet meeting the demands and interests of its clients,” said Joseph Ujobai, executive vice president, SEI.

“Technology integration and workflow management features available through today’s wealth management platforms are certainly helping, but it’s personal and online relationships that will close the gap between financial services and other industries.”