What Does Your Next Refrigerator Have to Do With Your Firm's Client Portal?

If you’ve been refrigerator shopping lately, you’ve probably noticed a proliferation of “smart” features attached to the modern equivalent of the previous century’s literal icebox. Today’s refrigerators can help you keep track of your grocery list, let you see what food you have in the fridge even when you’re not home, stream music, and play YouTube cooking videos. But what does this have to do with the client portal you offer your wealth and/or institutional end clients?

The answer is technological innovation.

It’s no secret that technological innovation continues to advance at a rapid pace. But the same innovations that retailers are using to make their products more digitally accessible, more tied into the Internet of Things, and more pervasive in our day-to-day lives can play a role in the client experience for wealth and institutional clients ─ specifically, via the client portal. The client portal is the future of the digital wealth and institutional client experience — the lynchpin, if you will, of an entire digital ecosystem that will change how clients interact with firms and with their investments.

How do we know? Because we’ve already seen it happen in the banking, retail, and mass-affluent industry sub-sectors. In these industry areas, a cutting-edge client portal already plays a critical role in client engagement, client satisfaction, and, ultimately, client retention.

And we’re also seeing this happen for wealth and institutional clients. In a 2021 survey, over 80% of wealth clients stated that they expected their wealth manager to continue building out the digital client experience going forward (past the COVID-19 pandemic). While wealth is typically further along the digital transformation path than asset management, asset managers are catching up. Fifty-one percent of participants in our 2022 Client Reporting Benchmarking survey stated they offer a client portal, a significant increase from the 2020 results when only 32% reported having a client portal.

Account Onboarding

When we look at how technology has changed the role the client portal plays in the wealth and institutional client experience, we would be remiss not to mention the outsized impact of the pandemic. Prior to 2020, client portals for wealth clients were considered a “nice-to-have,” while for institutional clients they didn’t even reach that status. However, the pandemic-induced sudden shift to digital channels for day-to-day business highlighted the need to build out client portals to match these new requirements. Digital onboarding plans — long languishing on the backburner for many wealth managers — were suddenly front and center for new development.

Today, digital onboarding is more commonplace in wealth management portals, thanks, in part, to the push to implement this technology during the pandemic. In our recent benchmarking report, 73% of firms we assessed offered fully paperless onboarding for, at minimum, secondary wealth accounts. Eighty-seven percent used e-signature technology, and just under half (47%) offered straight-through-processing for secondary accounts. These technologies make up the core of digital onboarding functionality.

Institutional clients, however, have not yet seen the benefits of a push for more digital onboarding. Naturally, the onboarding process for institutional clients is different than wealth — more complexity, more time needed, and a continued reliance on wet signatures. However, just because institutional client portals aren’t there yet, it doesn’t mean that this technology isn’t the future. Core technologies like e-signature tools, straight-through-processing, and even automated KYC/AML controls will also find their way into institutional portals in the near future, and asset managers need to be ready.

Portfolio or Account Overviews

For wealth and institutional clients alike, one of the most basic reasons to use a client portal is the ability to access account overviews or monitor investment portfolios without having to wait for an in-person client meeting or the next client report to be delivered. Both wealth and institutional portals make good use of dashboards to show client accounts. However, current technology allows for far more than a simple overview of holdings and a static historical performance graph. Rather, features like interactivity, drilldowns, look-throughs, virtual scenario-building, and comparisons against user-defined benchmarks are all now well within reach of even the most basic client portal.

But making full use of the technology for this functionality isn’t just about better data visualization. Rather, we see some more innovative features like account aggregation of all assets (custodial, non-custodial, non-bankable, alternatives) and embedded services like banking, payments, insurance, and planning now commonplace in wealth management portals — even for UHNW clients. One portal we evaluated in our recent research report Behind the Login: Benchmarking Digital Portals for Wealth Clients offered clients an overview of their carbon footprint based on their spending with the card associated with the account. While we don’t expect these use cases to be the same for institutional clients, the technology underpinning them, such as APIs, automation, and predictive analytics, will play a key role in the future institutional portals. Here, though, the critical challenge will be for asset managers to determine the best use cases for this technology. It will likely be similar but not identical to the use cases we see in wealth.

Communication

Communication is the third area where we see technology making a clear difference in client portals. The ability to use chat, messaging, video/ audio, and even screen-sharing and co-browsing has increased the number of potential communication channels between the end client and the firm. Naturally, for wealth managers, this means that advisors have a wider array of ways to meet clients wherever they are.

But for institutional clients, communication also can be an important client portal feature. The ability to message your service team or automate specific routine requests saves time and increases convenience. Taking this one step further, portals can help increase access to self-service options so that clients don’t need to send messages for routine requests. For example, institutional clients wishing to manage wire transfers or change basic admin information for their accounts can use self-service functionality in a portal. For wealth management clients, we now see options to schedule appointments directly with their wealth advisor through the portal — and attach documents for the upcoming meeting, submit agenda items, and invite third parties to attend.

It's important to keep in mind that communication within client portals isn’t only about offering a secure messaging option or providing a clickable phone number directly to a customer service team. Communication refers to any variety of different touchpoints between the client and the firm. The goal of communication is to harness the technology to provide clients with new and different ways to engage with their wealth or asset manager. This is good for clients and it’s good for firms.

Client Reporting

Technology in client portals is particularly promising in the client reporting area. Readers have perhaps noticed a theme in earlier sections: wealth management portals generally are ahead of institutional portals in using cutting-edge and innovative technology to support the digital client relationship. However, one area where this does not hold true is client reporting. Here, institutional client portals can hold their own by providing clients with access to customizable and interactive client reports, offering sophisticated document and report repositories, and more. Much of the innovation we see in institutional client portals comes from the client reporting functionality, where cutting-edge self-service options allow clients to dynamically create their own reports, including selecting accounts/subaccounts, adding/removing data parameters, and saving their new report template for future reuse. Consultants and operations staff who are major portal users find this functionality especially useful. This self-service feature is not only good for clients, but it also helps reduce the number of low-value requests made to client services teams.

For wealth management portals, self-service is also growing more popular. We see an ongoing trend toward new and better document vaults — what we call “next-generation document vaults.” These vaults, also found in some institutional portals, are different because they are bi-directional. This means clients and advisors, and service teams can both upload and download documents — for example, documents signed using e-signature technology. Wealth clients can also often upload non-wealth management-related documents like deeds, wills, estate plans, and tax documentation. These document vaults can also often be shared with a third-party — say, an accountant or an estate planner.

We’ve written plenty elsewhere about what we think the future of client reporting will look like. Suffice it to say, we’re placing our bets on the client portal as central to client reporting for both institutional clients and for wealth clients going forward.

But What About That Refrigerator?

The above four features show how technology allows both wealth and asset managers to build out more sophisticated, more personalized, better looking, and frictionless digital client experiences. However, many firms still don’t offer their clients sophisticated portal experiences. Small and mid-sized wealth managers and private banks often fall back to a default portal that lacks some of the more modern functionality like interactivity. Asset managers serving institutional clients are often still not convinced that their clients need (or want) a client portal at all.

This is where it helps to look outside our small corner of the industry. Here, the story is clear: technology keeps advancing and you must constantly innovate to keep up. Refrigerator manufacturers and other retailers learned this lesson early. While you may roll your eyes at a refrigerator that displays a picture of its contents so you don’t have to open the door, these manufacturers (along with e-commerce, entertainment, and fintech companies) have excelled at responding quickly to new and innovative technologies and finding ways to use them to build out their existing product lines.

Wealth managers and asset managers need to take note of this approach and find ways to integrate new technology into the existing digital ecosystem in order to provide a better overall client experience. A good client portal has become and will continue to be a key differentiator for wealth and asset managers. Firms nimble enough to view change as an opportunity, adopt new features when necessary, and find new and different use cases for existing technology will come out ahead.

If portals are an area of interest to you, be sure to check out the Client Experience track at Cutter Connect 2022. The role of portals will be a core discussion point at this conference.