Survey indicates that despite rising usage, wealth firms are failing to maximize the potential value of mobile apps
While the COVID-19 pandemic has led investors to drastically step up their usage of wealth-management mobile apps, the firms behind them still do not recognize the full potential the technology has to offer.
That’s the conclusion from the J.D. Power 2020 U.S. Wealth Management Mobile App Satisfaction Study, which found that customer satisfaction with wealth mobile apps is still behind those provided by other types of financial institutions.
“This is such a critical moment in the digital transformation of wealth management, and firms have a tremendous opportunity to leverage their mobile apps … But most wealth app offerings are missing the mark,” said Michael Foy, senior director of wealth & lending intelligence at J.D. Power.
According to the survey, a third of investors across both DIY and advised segments (33%) said they’ve used their wealth management firm’s mobile app more frequently during the COVID-19 pandemic, including 36% from those with advisors and 17% among DIY investors. Younger investors lead the pack in wealth app usage, as 45% of millennial investors and 30% of Gen Xers said they’ve used wealth apps more frequently this year.
But even as more investors turn to wealth-management apps for their needs, they’re not totally satisfied. The overall satisfaction score investors gave to wealth apps was 849 out of 1000, less than the scores given to apps used for credit cards (865), insurance (864), and banking (852).
Behind that finding, J.D. Power said, is the fact that during the height of the pandemic in May and June, 31% of investors said they had no recent advisor contact. Of those who did have contact, only 2% said the communication happened via mobile app or secure messaging.
Among the wealth apps profiled by J.D. Power – which included offerings from Chase, Wells Fargo, E*Trade, Charles Schwab, and Vanguard – just 35% offered chat functionality, and 41% supported secure messaging, despite the fact that both features are frequently requested by users.
“Advisors and their firms need to recognize that the mobile app is not a threat to the advisor’s value—it is an opportunity to increase engagement by meeting investors where they are,” Foy said.
Aside from impacting satisfaction with the app, J.D. Power said mobile features that support advisor engagement affect not just satisfaction with the app itself, but also investors’ overall satisfaction and loyalty to the firm. In its 2020 U.S. Full-Service Investor Satisfaction Study, the consultancy found that overall satisfaction among full-service investors who communicate with their advisors via their wealth firm’s mobile app score 40 points higher on satisfaction than their counterparts who do not.
“Wealth management firms need to recognize that the app is increasingly becoming their front door,” said Amit Aggarwal, senior director of digital solutions at J.D. Power. “Accordingly, they need to spend the time making sure that this channel is addressing customer needs, easy to navigate and seamlessly integrated into all facets of their business.”
