The number of investors who have switched providers has swelled 20% in the last three years, the global analysis and research provider for wealth managers said.
Of the 1,000 investors that participated in Compeer’s online survey, ranging from the mass affluent to high net worth individuals, 48% said they were either likely to switch providers in the next 12 months or on the fence as to whether they would.
Compeer believes the reason for investors’ fickleness is a result of charges becoming more transparent across the industry.
While respondents still viewed investment performance as the most important criterion when selecting a wealth manager, broker or adviser, fees ranked as the second highest consideration, followed by access to bespoke services.
Roughly 36% of those polled said they would be likely to switch providers if they found the same service for a lower fee.
However price sensitive clients said they would require at least a 22% reduction in charges before they were motivated to swap.
“The growing transparency in wealth manager costs and fees has led to an increasing awareness amongst investors,” remarked James Brown, Compeer’s head of client services.
“Not only are they watching the money they spend but they are also mindful of the service which they get in return. This growing consciousness, and an increase in investors shopping around for the best deals, provides savvy wealth managers with a growing target market.”
Digital revolution
Investors are also more mindful about the digital capabilities of their providers, with 58% currently accessing their portfolios online and one fifth via their mobile phones.
Many firms and investors are still slow to adapt a multi-channel approach, however. Some 43% of respondents have access to their portfolios via their mobile but don’t use it.
Still, “with so many investors more empowered to compare and contrast providers, it is essential that wealth managers embrace new capabilities – be that by offering access to portfolios via mobile, or deep-diving into newer, more advanced technologies,” said Brown.
“Wealth managers need to future proof now or they risk missing out on the next generation of investors who have grown up organising every aspect of their lives online and are used to that convenience.”
