This year, Refinitiv released its Wealth Management Report titled «The Gold Standard: Redefining Investor Data Needs». What is it about?
Oliver T. Ernst, Proposition Sales Manager for Wealth Management in Switzerland and Liechtenstein at Refinitiv, said: «The report is based on research commissioned by Refinitiv that surveyed 1,030 self-directed and advised mass affluent investors in September 2020, located in nine global financial centers: Switzerland, United Kingdom, Australia, Canada, China, Hong Kong, Japan, Singapore and the U.S.»
The report examines how investors' trading activities, data needs and digital expectations are evolving and delve into the critical role that data and analytics will play in a post-Covid-19 world.
Download the report to discover all the insights from over 1,000 investors.
The Gold Standard of Wealth Management: Redefining Investor Data Needs highlights how the pandemic created unprecedented levels of uncertainty, heightened levels of volatility, and changing investor expectations – all of which have led to increased client engagement and a growing appetite for advice, data and analytics.
The Growing Need For Data
Our headline finding is that clients’ needs, whether self-directed or advisory clients, are rapidly changing, and that investors across the board require new data and digital capabilities to maximize opportunities and mitigate risks.
Survey results also revealed that firms are not keeping pace: 39 percent of investors do not feel adequately equipped with the data and content they need to make optimal investment decisions.
However data alone is not enough, investors are looking for a multi-channel digital experience that helps them understand and manage that data to positively influence their investment decisions.
Respondents expressed an interest in being able to access a range of multimedia content, such as webinars, videos and podcasts, with the report concluding that wealth managers will in the future need to integrate high-quality data into multimedia content that can inform a broad mix of delivery channels.
This growing need for data is unfolding alongside increased trading frequency. When asked to what extent their investment activities had changed over the six months prior to September 2020: 38 percent of all respondents with a «trading mind-set» said their investment activities had become more frequent. This figure rose to 44 percent for millennial investors.
Long-term investor behavior also showed changes, with 23 percent of respondents overall saying that they had traded more frequently over this period.
While standard pricing data remains key, alternative sources of data are increasingly providing a fully rounded context, especially during the heightened volatility of the last 12 months, and we see a clear growth in demand for ESG indicators, news and social media analytics.
ESG Grows in Popularity
ESG investing continues to grow in popularity, even though access to quality ESG data remains a persistent hurdle. 34 percent of respondents globally are more interested in ESG investing now than they were six to twelve months ago. Drilling down, millennial investors are strong drivers of this trend, with 61 percent more willing to invest in ESG now.
To maintain this momentum, providers need to deliver accurate, transparent ESG data that offers sufficient coverage to allow investors to benchmark companies and make meaningful comparisons. Underlining the need for transparency is the fact that 24 percent of respondents cited greenwashing as a barrier to ESG investing.
Wealth providers should also make ESG data visually appealing and easy to consume since ESG data and analytics are essentially «new» to many investors.
Alternative Data a «Game Changer»
The survey found that investors are data-savvy, with many navigating multiple sources of data during the investment decision-making process. While trusted data is a key requirement, powerful analytics that makes sense of the data are invaluable. Alternative data – such as news analytics, product reviews, website activity, internet forums, and real-time ESG signals – is considered potentially «game-changing».
Around 54 percent of respondents agree that news analytics would be useful when making portfolio management decisions.
News analytics enable investors to pinpoint actionable insights from news sources through the use of tagging and metadata, allowing them, for example, to spot highly relevant and timely content, measure sentiment or forecast default risk.
A new approach
As the world adjusts to a new normal and optimism for a recovery grows, the increased appetite and need for data experienced during the pandemic are likely to have lasting consequences. Wealth managers will need to adopt a new approach, one in which they fully appreciate that investor needs and expectations have been transformed, alongside changing investment approaches.
Forward-thinking managers should focus on delivering powerful data and data-driven insights. Not only will a new approach such as this enable investors to optimize their decision-making capabilities, but it will also help wealth managers to differentiate themselves, remain relevant and deliver a positive customer experience.
Access the full report to find out:
- How COVID-19 has impacted investor needs and expectations around data and analytics
- How investor appetite for more diverse content formats and channels has changed
- Where there are gaps in alternative data, including ESG and news analytic
- Download the full report to discover all the insights from over 1000 investors
