Digital tools can boost business, but wealth management executives say that they aren't letting fancy new gadgets distract them from excelling at the fundamentals when serving wealthy clients.
"What we have found is that the clients want you to get the basics right first," Harsh Kumar, global chief operating office of Citi Private Bank, said during a panel discussion at the SourceMedia's InVest 2015 conference on digital disruption in wealth management in New York on Friday. (SourceMedia is publisher of Financial Planning, On Wall Street and Bank Investment Consultant.)
Of course it is extremely important to invest in technology, he says.
But Citi Private Bank has been concentrating its efforts in areas that help the firm and its financial advisors address clients' primary concerns, Kumar said.
A mobile application can't help wealthy and ultra-wealthy clients identify their goals are for their wealth.
"There is nothing you can do online to answer those [types of] questions," Kumar said.
GEN Y INHERITANCE
At the same time that they are navigating changes wrought by digital innovation, wealth management executives are adapting to the expectations of millennials, who will one day inherit their baby boomer parents' wealth.
David Satler, chief operating officer of Barclays Wealth and Investment Management, said as part of the panel discussion that this will be one of the biggest intergenerational wealth transfers in history and it is imperative for firms to understand the millennial generation.
"It is this segment that is going to be capturing [those] assets," he said.
One area of generational difference is that millennials have a greater interest in impact investing, Satler said.
"They are very well-educated, somewhat risk-averse and believe in environmental themes," he said. "It goes to their heart: Where is the company going to be investing their assets?
Of course, executives recognize that the younger generation is even more digitally wired than their parents or grandparents are.
Phil Sieg, Merrill Lynch's head of ultra-high-net-worth client segment and strategy, said as part of the panel discussion that his firm has seen growing demand from wealthy clients for digital services, particularly among millennials.
"They are using tech to communicate in the ways they want, when they want to. But it's not replacing the advisor," Sieg said.
But, Satler said that even if millennials are a digital generation, the wealthy, no matter their age, will always want personalized advice from a professional.
"This particular segment is always going to be defined by the advice," he said. "Advice is still the premium."
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