UK wealth managers embrace the Internet, says survey

UK wealth managers embrace the Internet, says survey

Four in 10 of the UK’s investment management companies already offer an online service, but within two years the figure is expected to climb to 77%, according to a survey by Byline Research for financial software specialist, iE.

According to the report “High Net Worth: Online Wealth Management”, which is based on interviews with 30 UK investment management companies, the increase in domestic and overseas competition in the UK, and the increasing expectations of clients that Internet services are part of the package is responsible for the surge in online development.

Some perceived obstacles remain, however. The most important of these are security and technical problems of integrating various back-end systems with client-facing software, cited by 63% and 50% of companies.

Commenting on the research, Hettie Hirst, head of wealth management at iE, said: “While the investment managers report that their clients are demanding online services, the research also shows that the same clients are wary. This is not a contradiction but a reflection of the problem that where the Internet is concerned good ideas have often been let down by poor execution.”

Unlike the high street banks, which saw the Internet as a cheap alternative to branches and telephone support, investment managers take a more sophisticated view.

James Wrighton, senior manager, online strategy, Coutts & Co, says Web-based delivery should complement a strong one-to-one relationship.

“We launched online banking over two years ago and a significant proportion of clients are actively using the service today," he says. "Our priority is to continue to enhance the service to enable clients to carry out quick and efficient transactions, give them access to up-to-date information and provide services that are unique to the online environment, while complementing the personal service provided by our private bankers.”

These views are backed up by the Byline Research. Eighty-three per cent of respondents to the survey said better service was more important to clients than lower fees.

Although a hard core of resistance remains and some firms continue to insist that the Internet is an inapropriate medium for wealth management services, the number committed to online delivery, particularly in view of the dotcom backlash is surprisingly high.

Sixty-three per cent said they thought that demand for their services would go up not down as a result of “difficult markets”, as clients move away from execution-only services towards professional management of their portfolios.

Comments: (0)