Working with “digitally-savvy” mass affluent customers, particularly on wealth management issues, requires moving away from a branch-centric service model to one that leads with digital tools and includes some personal interaction from a skilled investment advisor.
Unfortunately, many banks have been slow to “digitally engage” with the mass affluent market in ways that integrate both the personal touch of a financial advisor with a robust set of mobile and online investment management and budgeting tools, says Vin Malhotra, managing director, Accenture Strategy in Jacksonville, Fla.
“Most banks rely on relationship managers to do these types of analyses at a fixed point in time and provide reports in a bland and static format,” he says. “However, mass affluent clients desire dynamic and scenario-based views of their portfolio, as well as greater flexibility and convenience to conduct deeper dives when they want to do it.” Successful banks are deploying a digitally-oriented strategy first, in an effort to lessen the reliance of a “branch-based relationship manager-centric operating model,” Malhotra adds.
Malhotra is scheduled to appear at the upcoming BAI Retail Delivery 2014 on November 13 in a panel discussion about “Targeting and Serving the Digitally Enabled Mass Affluent Client.” The panel includes David Conover, president and chief executive officer of EverBank Wealth Management and EverTrade Direct Brokerage in Jacksonville; David B. Partain, vice president, wealth management marketing at Northern Trust in Chicago; and Barbara Power, head of mass affluent segment at SunTrust Bank in Atlanta.
Power says that SunTrust is answering the mass affluent segment’s need for more digital tools with SummitViewSM, a financial planning tool developed in conjunction with eMoney, that enables clients to integrate financial information in one place with the ability to test scenarios that can impact their financial plans. The tool also features an online “vault” for electronic storage of financial documents such as wills, trusts and insurance policies and a “Confidence Zone” meter that depicts whether the recommended strategies meet the customer’s financial goals.
SunTrust’s bankers, financial advisors and private wealth advisors use SummitView to work collaboratively with clients at the bank or in their homes using laptops or tablets. “It’s not as it used to be, when clients just handed their statements to a financial planner, answered some questions and then we came back a few weeks later to present the plan,” Power says. “This kind of approach helps clients collaborate more with their planner on creating the plan and, more importantly, acting on it.”
Northern Trust has likewise employed a number of digital strategies to better engage its clientele, typically older people who are more receptive to communicating with bankers via email, text messages and professional social media sites like LinkedIn instead of Facebook, according to Partain.
Within LinkedIn, for example, Northern Trust has developed a group for nonprofits executives because many of its clients and prospects tend to serve on boards, he said. Bank staffers moderate group discussions on the challenges nonprofit board members can face, such as how charitable contributions can affect personal tax returns. Northern Trust also sends clients information about marketing initiatives or news via emails, text messages or Tweets to “whet their appetite,” Partain adds.
Based on recent polling, Partain and his team have found that the bank’s clients want to be able to access their accounts on any type of device, so the team is fashioning emails and text messages for all types of devices. Clients get more in-depth information about their accounts in emails when they conduct analyses using their personal computers or laptops, but much simpler account information, such as balances and recent transactions, within text messages on their mobile devices. Northern Trust’s team has also found that short videos are effective ways to demonstrate features within its digital applications, such as how clients can send money via email to their gardener, dog walker and other higher-end services, Partain says.
“Mass affluent customers really want to know whether they can meet specific goals, such as buying a second vacation home or funding their daughter’s wedding, and they want to know that their investments are working towards those specific goals,” he says. “We’ve built software that demonstrates how we tie each financial goal to their portfolio and our salespeople in the field can access this tool during a meeting with clients in their homes.”
EverBank, a financial institution that offers banking, lending and investing services, utilizes a predominant digital delivery model, Conover says. As such, Everbank clients tend “to be more tech-savvy than the average banking customer.”
While EverBank has several financial centers in Florida and lending offices nationwide, the bank typically markets via the Internet to attract prospects, offering high-yield savings rates, attractive loan rates and innovative investment products such as certificates of deposit tied to foreign currencies, he says. As a result, EverBank has the ability to offer its services on a much greater scale.
Through its database, the bank can mine client characteristics and preferences using predictive analytical tools to attempt to determine “the next best sale,” Conover says. EverBank is also constantly improving its digital delivery, including its online brokerage services.
“There are many different online trading platforms, so the question becomes, how do we make sure ours is relevant?” he says. “The answer is not to necessarily be the cheapest or the fastest, but to offer a package of products, including financial management and advice tools, in a way that enhances the customer’s online experience, so they’ll want to continue to do business with us.”
Conover and his team expects the mass affluent segment to be “extremely attracted” to a strong digital platform that has aggregation and analytics functionality and that will deliver performance. “I truly believe that banks need to adopt some of the practices from the Robo-Advisor movement, as clients, particularly post Baby Boomers, are increasingly demanding them,” he says.
Ms. Kuehner-Hebert is a contributing writer to BAI Banking Strategies based in Running Spring, Calif.