There has been a lot of commentary recently about how wealth managers are having to embrace digital technologies of all kinds to stay relevant. A year ago, a study found the changes were not that far advanced. Given the COVID-19 crisis, there's clearly enormous potential for change.

Fewer than a quarter of independent registered investment advisors (24) said that clients polled last year read reports and statements via digital routes, a report says. This suggests that there is enormous potential for change as established relationships are upended by social distancing.

Envestnet, the New York-listed wealth management systems firm, noted in a white paper issued this week that when it polled independent and hybrid RIAs in the middle of 2019, client adoption of digital tools was low pre-COVID-19. Only 24 per cent and 27 per cent of independent and hybrid RIAs, respectively, said that most of their clients were using digital access. Only 12 per cent of surveyed independent RIAs responded that the majority of their clients were checking investments and goals digitally. Some 21 per cent of hybrid RIAs indicated that most of their clients were using digital investment planning tools.

"The COVID-19 crisis will have significant implications for how financial advice will be delivered going forward," Andina Anderson, executive managing director of Envestnet | Tamarac, said.

The study is an example of how firms are trying to cope with lockdowns, remote working and the brutal impact on the underlying economy. Firms such as Hightower have rolled out offerings designed to help advisors boost revenues and sharpen up marketing and business development. With some clients probably unhappy about service quality from certain firms, there is likely to be a war for new business in coming months - much of it taking place over digital channels. 

Aite Group conducted an online survey of 400 financial advisors in the US, including 98 independent RIAs as well as 48 hybrid RIAs with a broker-dealer affiliation, between April 2019 and June 2019. 

Findings
Among the findings, the study showed that independent and hybrid RIAs consider the acquisition of new clients to be the top benefit of digitalization, and view digital tools as crucial for engaging younger prospects and the next generation of clients; few advisors are satisfied or very satisfied with their client-facing digital offerings; client communication and training are the most critical, and often overlooked, steps for RIAs seeking to drive client adoption of digital tools; and best practices for RIAs engaged in the digital transformation include developing a formal strategy, dedicating technology resources, segmenting clients, and conducting vendor reviews.

An issue raised by remote working and heightened by the use of digital channels is cybersecurity. Greater reliance on such channels boosts risks of hacking attacks, outages and data breaches. A report recently predicted a surge in the global market for cybersecurity insurance.