I will be attending the 2019 In|Vest conference this July in New York. Like everyone else in the industry, I am keen to hear the latest on what’s happening in digital wealth management from incumbents like J.P. Morgan and its no-fee investing app You Invest, including whether it will evolve it to offer digital advice capabilities. I’m also looking forward to learning more about Goldman Sachs’ foray into retail wealth management through its acquisition of United Capital.

I am also excited to see the demos from technology companies like Appway and the challenges they are solving. Onboarding in wealth management presents complex scenarios, and Appway is using AI, machine learning, and smart analytics to perform background checks seamlessly. Case in point: Credit Suisse’s digital onboarding platform, built with Appway’s digital process automation platform, allows Swiss residents to open an account digitally using a video call to verify identity, which results in a 65% reduction in errors compared with manual client onboarding.

While the latest from J.P. Morgan, Goldman Sachs, and Appway will drive buzz and discussion, as part of my upcoming research, I am most keen to see solutions at the conference that ultimately appeal to the following four distinct investor segments:

  • Delegators — “I prefer to hand off all decisions to a trusted advisor.”
  • Validators — “I will do my own research and then confirm my thinking with a trusted source.
  • Self-Directed — “Let me find and research my own investments.”
  • Disengaged — “I don’t do much beyond my 401(k) provided by my employer.”

In my upcoming report, I measured the level of self-directedness of investors by asking consumers how strongly they agreed with the following statements on a five-point scale:

  • I do my own research when making investment decisions.
  • I make investment decisions on my own.
  • I rely on advice from financial professionals when making investment decisions.

What emerged was an insightful measure of how each of these segments does investment research and makes decisions, as well as where they go for financial advice. Insights on their level of digital savviness were also revealed, including:

  • How open they are to receiving digital financial advice.
  • Whether they use digital tools to make investment decisions.
  • Whether they are open to using a robo-advisor solution.

Investment and wealth firms continue to segment investors by assets; however, this is not enough to help firms decide on new products and services or the best customer engagement models. Investor self-directedness is the key input of the attitude-based segmentation and a very good predictor of customer behavior.

If you have examples to share on how firms in the wealth and investment management space are using digital technologies to address the distinct needs of these four segments, feel free to contact me or connect with me at the conference. I expect to publish the report before the conference. See you in July!

To see my latest research, please click here.