- Avaloq research reveals investors would consider switching from a wealth manager that does not modernize and embrace new technology.
- Investors value investment analytics and real-time portfolio visualization as essential components in building trust with their wealth managers.
- Singapore investors are open to using AI for investment guidance, and Singapore wealth managers believe that AI will be integral to the wealth management industry in the future.
Nearly half (47%) of Singapore investors have at one time considered switching their wealth manager or bank, according to Avaloq, a leader in wealth management technology. The top reason for switching cited by Singapore investors is weak portfolio performance (43%), followed by a lack of transparency and communication (31%) and a reluctance by the wealth manager to adopt modern technology (31%).
Avaloq’s latest research on the wealth management industry, based on surveys of 3,012 investors and 341 wealth management professionals across Asia, Europe and the Middle East, found that a willingness to embrace technology is a driver of client trust in their adviser. Over two-thirds (67%) of Singapore investors report that being shown the impact of their investment decisions on their portfolios during live meetings is crucial to building trust in their adviser, with a similar proportion (65%) noting the value of being able to see investment analytics and portfolio visualization. Unsurprisingly, the top factor for establishing trust between advisers and their clients is the ability to professionally manage the investment risk of the client portfolio and consider the client’s risk appetite (77%).
Despite the importance of effectively using technology, Singapore wealth managers report dissatisfaction with their technology systems. 62% of industry professionals surveyed by Avaloq describe their systems as hard to navigate and more than half (57%) report that they need to use too many systems to complete their tasks and that data is not seamlessly integrated across all systems. 67% of Singapore professionals believe their current systems are outdated. These shortcomings in their wealth management tools are hindering Singapore advisers from offering more personalized advisory to clients. According to those surveyed by Avaloq, the top technology barriers are difficulty in accessing client data (55%) and lack of client data analytics (52%).
Given these challenges, many wealth managers struggle to meet their clients’ expectations on technology use, with 29% of Singapore wealth management professionals still not using investment advisory tools live in client meetings. 92% say the user interface of their tools is not optimized for this purpose. Of those who don’t currently use their advisory tools live in client meetings, 92% would like the option to do so, revealing a significant gap between current capabilities and expectations.
When it comes to future technology in wealth management, Avaloq’s research revealed that artificial intelligence (AI) will play a key role in Singapore, with just 22% of Singapore investors expressing discomfort with the use of AI in investment advice. A similar sentiment is reflected by wealth management professionals, with a majority of Singapore respondents agreeing that AI will benefit the industry (79%) and that it will be integral to how they perform their work in the future (83%).
Vibhooti Chaturvedi, Regional Sales Director and Head of South Asia at Avaloq, says: “Technology is essential to helping investors better understand the performance of their portfolios through visualization, enabling them to become more engaged in the investment process. However, wealth management professionals are often hampered by a lack of integration across their various systems as well as unintuitive interfaces. For wealth managers in Singapore, this creates a barrier to building greater trust between advisers and their clients. At the same time, a lack of data and system integration can prevent firms from effectively scaling their personalized offerings and expanding into new markets. As investors in Singapore and across Asia grow more confident, it is crucial for wealth managers to overcome these technology gaps so they can effectively guide clients on their wealth-building journey and foster long-term financial growth.
About the research
The Avaloq wealth insights 2024 report is based on online surveys of 3,012 affluent to ultra-high net worth investors and 341 wealth management professionals with a minimum of 5 years’ industry experience. The research covers 11 European, Asian, and Middle Eastern markets: Germany, Switzerland, the United Kingdom, the Netherlands, Belgium, Luxembourg, Hong Kong, Japan, Thailand, Singapore, and the United Arab Emirates. The surveys were conducted in February and March 2024. The report includes contributions from BlackRock, EY, Kasikornbank, NEC Laboratories Europe, Oracle and UnionBank of the Philippines.
About Avaloq
Avaloq is a premium provider of core banking and wealth management technology for over 170 financial institutions around the world. Its clients include private banks, wealth managers and investment managers, as well as retail banks. Avaloq develops software that can be deployed flexibly through cloud-based software as a service (SaaS) or on-premises, and offers banking operations outsourcing via business process as a service (BPaaS). Avaloq is a subsidiary of NEC Corporation, a global leader in the integration of IT and network technologies.
