Wealth managers are at risk of losing clients if they do not adopt modern technology to improve their services, research from tech provider Avaloq has shown.

It found that 25 per cent of global clients would consider cutting ties with their wealth manager if they did not keep up with technological advancements.

Willingness to modernise their offerings was found to be a key factor in clients’ confidence in their wealth managers, with two thirds (66 per cent) of investors stating that being able to see their investment analytics and portfolio visualisation was crucial to building trust.

Furthermore, 63 per cent of clients surveyed emphasised the value of being shown the impact of their investment decisions on their portfolio in live meetings.

However, the research revealed that 44 per cent of wealth managers felt their systems were outdated, and 31 per cent believed their systems were not suited to their requirements.

When looking at the UK, the technology gap was found to be even larger, and clients felt technology played a larger role in building trust.

Nearly three quarters (72 per cent) of UK investors highlighted the importance of being able to see their investment analytics and portfolio visualisation.

Despite this, half (50 per cent) of wealth managers in the UK do not use investment advisory technology with their clients in live meetings, compared to 37 per cent globally.

Avaloq also revealed that there was a lack of system integration among UK wealth managers, with 57 per cent stating their systems were not well integrated, compared to 45 per cent globally.

Commenting on the findings, Avaloq UK managing director, Suman Rao, said: “Our research reveals that while wealth managers are under increasing pressure from clients to incorporate technology into their offering, many are struggling to keep up due to complex, outdated and poorly integrated technology systems.

"Despite this, their reliance on technology is growing by the day and demand from clients is only going to increase. If wealth managers want to remain competitive and ensure they are delivering top client service, they must have a well-functioning technology ecosystem.

"That said, the responsibility is not all on the wealth manager, technology providers must also step up to ensure they are delivering the analytics, automation and visualisation needed by both wealth managers and their clients.”

---