Nearly $200bn in revenue may be at stake worldwide, as 40% of all clients are open to switching wealth managers under the right circumstances, according to EY's latest global wealth management report.
The study found that wealth managers that fail to make strategic investments to deliver a superior client experience may risk losing a substantial portion of their current business.
EY wealth management advisory leader Gregory Smith said: "The dynamics of the wealth management industry are changing rapidly. Retaining clients will become a high priority for firms, given the increasing awareness around robo advisors and new advice models. Wealth managers need to engage their clients more than ever and invest in a creating better customer experience – increasingly using digital technology."
The study found that wealth managers and their clients have contrary opinions in three key areas: transparency, advice delivery channels and the advisor's role.
According to the survey report, clients are increasingly questioning the transparency of portfolio performance and fees. Also, they're eager for a new level of transparency that includes rating their advisors and connecting with similar clients in public forums.
Clients are also considerably more open than firms to adopting digital channels for wealth advice, not just service, the report noted.
Commenting on the role of the advisor, the authors of the report said they may become more like a financial therapist in the future, helping clients with spending habits or reaching life goals instead of strictly providing standard asset allocation advice or other activities that could be automated.
"In Canada, with the advent of CRM2, our wealth managers face similar challenges as their global counterparts. They need to expand their services accordingly to offer more comprehensive, goal-oriented advice. On top of that, they must consider engaging with clients through digital platforms and even social channels," Smith added.