MyPrivateBanking Blog
Daily Comments on the World of Wealth Management

Working on our upcoming report on “Mobile Apps for Financial Advisors” I couldn’t help but notice the ongoing debate about which kind of app to use. At the first glance it’s a fast told story: you can either go mobile with a native, a web-based or a hybrid app.

Native apps are written to their specific platforms like iOS or Android and are easily found in each platform’s app store. Native apps do not depend on Internet connectivity, which is an important advantage for financial advisors - just think about visiting your client at home with your first question being: “How is your Wifi password? My iPad is disconnected!” In addition, native apps allow for the use of elaborate graphics. One of the major drawbacks, however, is that their development is comparatively expensive and time-consuming.

With HTML5-based apps advisors can use their app on any device. Screen size and operating system do not matter. Also, app content can be found by search engines, which pleases the marketing manager. The problem with browser-based apps is, however, that the implementation may vary across browsers and platforms, native device features such as camera or geolocation cannot be used and, because an Internet connection is required, the app performance might be slower and runs the risk of breakdowns. An even more important argument for financial advisors, however, is that unlike native apps, web-based apps lack secure offline storage.

For those who wish to use their device’s features but are looking for a cheaper alternative that works offline as well, there is a compromise: hybrid apps combine advantages of both native and HTML5, though problems might appear due to the fact that they use the browser natively installed on the device, which might lead to differences in the way the content is displayed.

Actually, among the mobile solutions we are examining for our upcoming report there is a colorful multitude of approaches. In the end the wealth manager is spoilt for choice when it comes to priorities: if you want marketing leverage, sophisticated design features and quick penetration of your target client segments you probably better go for native apps. But if you prefer flexibility and lower development costs, a browser-based HTML5 solution can offer you more bang for the buck.

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The relationship between clients and their financial advisors has undergone a fundamental change within the past few years. While in the past wealthy clients relied heavily on the recommendations of their financial advisors and private bankers, the situation nowadays looks fundamentally different. On the one hand there is the older, yet shrinking client segment that mainly still depends on what their financial advisor proposes while on the other hand a new generation arises, namely that of the young and tech-savvy.

Though (on average) not yet earning the really big money, the urge of moving independently and self-confidently on today’s markets encourages them to deal with do-it-yourself-investments. As this generation has grown up with the Internet and all its possibilities, they know where to find the information and support they need. Most recent developments offer them tools known as robo-advisors that promise to replace face-to-face meetings with costly advisors. These tools help them to build up and manage their portfolio, give recommendations about which assets to sell, buy or to hold, and support personal financial planning. Robo-advisors range from pure technology websites to established financial service companies which are enriching their services by offering online advisory. Probably the best known example in this new, fast-growing space is a start-up company called WealthFront, based in Silicon Valley, which has just surpassed USD 500m assets under management. This trend is also partly triggered by the rise of low-cost, indexed ETFs, on which this younger generation mainly focuses rather than on active investments.

In essence, robo-advisors claim to offer not only substantially lower fees but also (in the long run) higher performance as investment decisions are taken by sophisticated, self-learning algorithms rather than error-prone human beings or investment committees.

So far, robo-advisors have only a miniscule market share in the overall wealth management market. However, we believe that over the long run such platforms could play a much bigger role, threatening established wealth management firms and eroding fee levels. Every wealth advisor firm should very closely watch these new competitors and think about defensive measures.

In the longer-term, it may be even a matter of life and death for established private banks and wealth managers to think about integrating the robo-advisor business model in their own offer for wealthy clients. The personal relationship with clients and their trust is today’s biggest asset of wealth management firms around the globe. But isn’t it true that these relationships and the hard-earned trust have recently been under attack – especially since the financial crisis started five years ago? It is not too farfetched to assume that this erosion will accelerate over the coming years and robo-advisors will play the role of catalyst in this process.

Wealth managers and private banks need to re-invent themselves and think hard about how to integrate elements and ideas of the robo-advisory-model in their own business model. How exactly this might look is the billion dollar question.

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By Francis Groves, Senior Analyst

One of the success stories of 2013 was BrewDog, Scotland’s largest independent brewery, who managed to raise £4.25 million through its crowdfunding scheme ‘Equity for Punks’, ably supported by its own dedicated Twitter stream, #equityforpunks. It’s a heart -warming story and not just because of the beer! A business dedicated to craftmanship in a small community in a picturesque and remote part of the British Isles makes good with the support of loyal supporters around the world.

However, it does highlight some problems for less colorful players in the financial world. BrewDog’s success in financial AND media terms doesn’t offer helpful lessons for wealth managers just because it’s all to do with popularity. And popularity can be ‘here today and gone tomorrow.’ Not that wealth managers have to be unpopular but, in social media terms, they should aim for stimulating and interesting. Wealth managers need to be involved with social media for the long-haul in a way that matches their business. Because, in all sorts of ways - be it investment as deferred enjoyment, contrarian investing or a wealth management approach that has been refined over decades - wealth management is a longer term business.

And to make a long-term business interesting, it needs to show its customers (through social media) that its changing, developing and growing in a way that reflects its own DNA. To put it another way, wealth managers and private banks should be using social media to allow their clients and potential clients to really get to know them. As MyPrivateBanking have often said this requires authenticity on the part of the wealth manager but clients won’t get to know wealth managers through just a Twitter stream or even their Facebook Timeline. These should be used as pointers to the wealth managers expert blog, video commentary or website corporate social responsibility items.

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Trying to stay ahead of the curve when it comes to technological development is a challenging task. In 2013 rapid movement has affected the finance industry landscape: mobile banking has established itself as a regular touch-point for customers, mobile payments have exploded and banks are wrestling big data more than ever. We have surveyed our analyst team to note down in short the most important technology trends for the banking industry in the post-PC era for 2014:

10) One interface for all channels
As digital touch points evolve, users’ tendencies to contact financial services online will grow alongside. Using a variety of different devices is one consequence. Financial providers, therefore, will have to create a uniform experience across all channels, with the same level of real-time responsiveness and personal service.

9) Financial Education goes gaming
For reaching the generation that grew up with computer games, banks will have to come up with innovative approaches. One possibility is to put the fun in finance: offering a variety of games that playfully educate not only children, but also adults.

8 ) Slimming the wallet
In the future banking technologies will mainly focus on reducing complexity and enhancing user experience. One of these gadgets will literally show how to slim your wallet: One example is the technology from start-up “Coin” based in San Francisco: the electronic card that stores multiple cards on one Bluetooth device, can merge all your credit and debit cards with the support of an adapter and a mobile app.

7) “What’s App” inspires communication channels within apps
Chat functions modeled after the popular “What’s App” will enter banking apps. Connecting with your advisor will be easier, more personal and convenient than ever. Provided banking app developers hear the call.

6) Voice command on the rise
Some banks have already come up with features that allow, for example, voice recognition for log-ins or entering simple commands. Banking apps will take this one step further and remove the need to use buttons, dials and switches completely.

5) Windows Mobile gaining market share
Of all of the leading operating systems, Windows Mobile obtained the largest year-on-year growth worldwide. A result primarily driven by the support of Nokia. Nevertheless, Windows Mobile is likely to become the 3rd most important platform next year to distribute financial apps.

4) Demand for digital advisors
Digital advisor tools will become an important part of the digital channels of bank. These include budgeting or financial planning tools, and also complex instruments for risk assessment and investment decision making are up and coming. Besides improving user experience through interactive features and personalization options, these tools create a unique overview and understanding of the user’s personal finances. Supporting customers to strengthen their own financial know-how might replace the personal advisor in some cases, but will open up valuable insights into customer behavior and increase loyalty in the long run.

3) Wearable banking
As the first banking apps for Google Glass roll out, potential customers are already excited. Wearable gadgets that allow various services through voice command or simple touch are coming to life. Although still in their infancy, these technologies will progress and soon your watch will call out when your credit card account is maxing out.

2) Digital Currencies gain Legitimacy
Although there remain serious doubts about virtual money, currencies like Bitcoin, Litecoin and co. will gain popularity and legitimacy, and not just within the virtual economy. The arena is moving from online gaming platforms to real-life goods and will gain widespread use with online retailers and potentially even with banks. Will your digital channel enable Bitcoin payments soon?

1) Big Data: generating value from app-user information
The financial technology landscape is evolving, and so is competition, complexity and the amount of data processed and generated every day. Particularly, information derived from mobile users has a high potential and will generate new insights. Banks will thereby be able to create completely new products and differentiate themselves on the market.

We wish all our clients and readers relaxing holidays and a happy, successful New Year!

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The world was amazed when Richard Branson, CEO and founder of countless consumer ventures, started to tweet three years ago about his company, events and his personal life. Branson was one of the first CEOs who broke with the common practice that high ranking representatives of companies should stay out of social media. The legendary entrepreneur started tweeting and many were to follow.

Large banking groups and multinational wealth managers feel the challenge to give their firm a human face in age of digital ubiquity. Personal contact with clients, to build or launch relationships, is invaluable especially for wealth managers. With more people spending more time at their desktops, notebooks and mobile devices in the big 5 social networks offline personal contact becomes a scarce good. However, social media offer new opportunities to get close and personal to client. But corporate social media presences and company profiles on social media are not sufficient to foster a real personal relationship on a social network. Only individuals can offer that human touch: Why not follow my personal financial advisor via her Facebook updates? Why not talk to my wealth manager´s CEO via Twitter? Why not ask my bank’s head of the investment committee about the latest economic insights on LinkedIN?

Personalized social media refer to social media channels on either the local/regional level such as country, state or branch level and personal social media presences linked to one person such as a CEO, CIO, or a regular personal financial advisor. These presences bridge the gap between wealth manager and client.

The global wealth manager UBS allows clients to take a closer look at CEO Jürg Zeltner via his personalized blog on the website. Users get information about his career and development within the bank, can listen to his podcasts and read his regular updates.

Alan Higgins, UK CIO of the English wealth manager Coutts, is remarkably active on his Twitter channel. Besides financial market updates he also tweets about cultural events or “best movie of…” list. Moreover, Higgins pays attention to his users by responding quickly and casually to comments to his tweets. A lively Twitter account with high value for customers and a real personal touch are the results.

An outstanding example for local level presences is also German Commerzbank which serves its customers with channels on Facebook for its Hamburg and Munich branches. Customers can get information about opening times, the local team and contact options. The social media team invites users to local events to get to know the bank bridging the online-offline customer experience.

One can imagine many more ways to use social media as a tool to personalize the client experience. It’s up to the financial institutions to leverage this opportunity despite regulatory and other hurdles that might limit the specific content a bank can publish over social media channels.

Our new report on Social Media for Wealth Management 2013: The Train is Leaving


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In our recently published report on social media for wealth management, our analysts included Google+ in their evaluation of wealth managers’ activities on the ‘big 5′ of social media platforms. Launched in June 2011, Google+ not only caught up with Facebook, Twitter, LinkedIn and YouTube but even reached the second place in user activity after overtaking Twitter, by the mid of 2013. With 34% of all Internet users being present on Google+, only Facebook with 46% is still capable of defending its first position.

Given these developments the findings of our analysts are somewhat striking since the overall performance of the 30 evaluated private banks on Google+ is in clear contrast to its increasing importance. On average only 22% offer a Google+ presence. While the consensus still seems to be that being present on the other social media platforms is important, Google+ will gain influence rapidly. Why?

- Because the trend clearly depicts it: after 88 days Google+ had 50 million users. Facebook reached that after 3 years.

- Because it belongs to Google: presences on Google+ definitely have an advantage on Google Search results.

- Because it’s different: information is posted in real-time, without being limited to either space or channel. It gives a more professional impression than Facebook and has more interactive features than LinkedIn.

- Because of selectivity: information can be spread to the right persons through segmenting posts by ‘circles’ (note: Facebook has introduced a similar feature).

- Because of YouTube: Google’s other big social network YouTube, the most important social video platform, is strongly linked to Google+ - moreover, a Google+ account now even is required to sign in for YouTube.

- Because of smart features: Hangouts can be used not only for private chats but also for webinars, directly being posted on YouTube, or conference calls with up to 10 participants.

What is the take away for wealth managers’ social media strategy? Google+ must not be underrated. As the stepchild of social media is growing up, it should be taken seriously - underestimating its influence might carry the danger of lagging behind in the competition for the eyeballs of your clients and prospective clients.

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Evan Spiegel, the founder of Snapchat has been in Europe since turning down the $3 bn offer from Facebook. He has repeated some of his interesting insight and analysis of the social media scene. These include his observation that, unlike Snapchat - which is genuinely recreational in character - Facebook, Twitter and others are all to do with personal branding.

Whether or not you consider personal branding to be cool - Evan Spiegel seems not to - we wonder what kind of private banking would align itself well with possible personal brands. The possibilities for personal branding must be almost endless and no bank could expect to match more than a fraction of them. Nevertheless, there must be some basic pointers that private banks would be well advised to pay attention to.

First off, very, very low rates of interest on clients’ cash deposits is a contemporary fact of life that doesn’t sit well with anyone’s personal brand; it probably makes the customer feel like a sucker. So bankers have plenty of ground to recover in other ways to make clients to want to include them in their personal brand.

The strategies that could help here are an energetic approach in areas like corporate social responsibility and sponsorship. Another area where there is scope for banks to make themselves more appealing is through gaining a reputation for their business banking services to inspiring entrepreneurs or interesting brands.

A bank that is actively (and helpfully) contributing to the market for ideas about investment, economics and business in general will also find that it can become part of clients’ personal brands more easily. If the bank has staff with a recognized media presence on old media and/or new, the likelihood of gaining a place in a customer’s personal social media brand is all the greater.

All these are factors that can make a difference to a bank’s reputation not only among those who cultivate a personal brand but also banks’ less self-aware clientele. However, no private bank has a chance of building the kind of profile that clients like to associate themselves with on social media unless it engages with social media itself.

Our new report on “Social Media for Wealth Management” will be published next week.

(This post is authored by our senior analyst Francis Groves)

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Many banks and wealth advisers are struggling while trying to keep up pace with the rapid developments in our highly digitalized society. Particularly in the fields of mobile development and online adaptation, financial institutions are more and more challenged to meet the needs of the technology-savvy customer by providing an excellent user experience. Adapting the online presence to the mobile environment can only be considered a first step. Regarding these trends, our analysts have introduced some new criteria to this year’s (4th) edition of the MyPrivateBanking ‘Websites for Wealth Management‘ report. In comparison to the 2012 report we included criteria such as, external Internet recognition and the adaptation of the website for mobile devices. Particularly the latter has sadly proven to be a weak spot for most of the wealth advisors under evaluation.

As basic as the adaptation of a website to various mobile devices, such as smartphones and tablets should be, our analysts were disappointed with the outcome of the evaluation. Full scores were only achieved if the entire website worked well for use on a tablet and a smartphone (whether or not it has been adapted) and points have been deducted for lower stages of adaptation. Around 60% of the banks scored points for this criterion with an average of 1.82 points (of total 3 points). While only 15 of the 50 Banks under evaluation offer a manageable version of their website for both devices, the majority only provides a functioning format for tablets. On average the performance of the smartphone-versions is weak: only a few are manageable without holding the device either horizontal or enlarging the font. Amongst the 27 banks that provided more or less manageable smartphone versions are, again, only very few banks that offer a reduced and adapted version of their website.
For the ‘digital native’, as the client of the future can be described, it will be crucial to gain fast access on the go, when searching for information on the respective website. Providers also have to keep in mind that consumers are moving towards a technological development that promotes device hybrid versions and even smaller tablets. Living in this digital environment certainly brings a host of exciting prospects, but also raises questions about how to adapt to new technologies. The concept of responsive design offers an approach that can support struggling wealth managers: It aims at crafting sites to provide an optimal viewing experience, including easy reading and navigation with a minimum of resizing, panning, and scrolling, across a wide range of devices (from mobile phones to laptop computer monitors). A website designed with a responsive design adapts the layout to the viewing environment and allows the user an undiluted experience. But it is important to keep in mind that the user is not forced to a specific website format. There should always be an easy way back to the full (desktop format) website when a mobile device user wishes to do so.

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MyPrivateBanking’s research analysts, working on our upcoming report on wealth manager websites, have been impressed with a number of sites that provide contact people or, in a few instances, contactable senior management or research experts.

In one exceptional case, a private bank has made almost its whole organization contactable to website visitors. Although we don’t yet have the final aggregation of data from our evaluation of 50 of the world’s leading wealth managers (the report is due out in the first half of November), this looks like one area in which wealth web presences are steadily improving. While MyPrivateBanking can see that some contacting policies can’t accommodate having named contact people as easily as others, generally speaking we strongly support having named contacts as a key way to enhance wealth manager websites.

Just to see a contact with photo and job description can trigger all sorts of reactions from site users beyond the obvious ‘I could contact that person’. For example, a website user may read into the presence of a contact person any of the following: ‘they don’t just process new business prospects like a machine’, ‘people in this bank stay around for long enough for it to be worthwhile for the bank to put up photos’, ‘this provider doesn’t give fee information on their site, but this contact may be willing to tell me what I want to know’, or ‘the bank has empowered this person significantly by doing this, there must be real trust there, to me this suggests that this is an organisation where people matter’.

These ideas may not be accurate and the person thinking them may reconsider their initial reaction; they may not even react positively. The point is that even if it’s only for a moment or two, the website user has considered a next step in engaging with the wealth manager in question.

Our new report on wealth management websites will be published early November.

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E-magazines and e-books will soon overtake printed publications in terms of market share in developed countries. The tablet revolution has made a deep impact on the publications market: habits of readers are changing fast and user needs with regard to digital publications are changing even faster.

If you want to capture your digital audience it is of critical importance to think about digital publications not only as the electronic twins of the printed versions but as a completely new and different animal. There are so many features in digital publications that can excite and win readers (search function, integrated video and audio formats, zooming, living links, self-updating charts etc. etc.). Any publisher needs to think very carefully about what functions and features to add.

For wealth managers daily, weekly, monthly and quarterly publications are an important tool to ensure client loyalty but also to gain new clients. As more and more people move to the digital usage of publications this brings up a big opportunity to rethink and reinvent a wealth managers’ publications strategy from the ground up.

In our new report “E-Publications for Wealth Management Clients” we are tackling these complex issues: how should a good e-publication look? Which features are required? What formats and digital delivery channels (including) mobile should be used? What content is most appealing to readers? And so on…

Most wealth managers invest substantial resources in the communication with clients via regular publications. To spend these resources wisely reading this report is imperative.

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