There is a difference between communicating and getting your message across.
Thanks to electronic communication and texting from smartphones, there is no shortage of ways in which investors can talk to their advisors, and advisors can get information out to their investors. But the various mechanisms for these connections actually makes modern communication more difficult for financial providers and firms.
A few years ago, financial providers were encouraged to create fully functional and informative websites, where investors could find all forms of various information related to financial products and services.
But, when smartphones were created, they prompted the creation of a new form of communication called “apps’’, which is short for applications. These apps are easily downloaded onto a smartphone, allowing a single-touch access to information from companies, including financial advisory firms.
However, the availability of apps meant financial providers had to develop their own apps, and had to determine what information would be available via app versus the information that is available via website.
Is it necessary for advisors and financial providers to develop their own apps, when their website is fully stocked with information? The answer, according to research completed by Spectrem Group, is “yes”.
In Spectrem’s annual study of investor habits related to social media and new technology, many investors prefer using apps on their smartphone or tablet over going to the website. Among Ultra High Net Worth investors with a net worth between $5 million and $25 million, 16 percent prefer using apps, while 52 percent prefer websites and 32 percent will use whichever tool is handy, or already downloaded onto their phone or tablet.
“Like social media communication was five or 10 years ago, apps usage is on the rise,’’ said Spectrem president George H. Walper Jr. “Investors are going to want to have information available via app, just as they want information available via website, and they want advisors available for communication via social media sites like Facebook or Twitter.”
Apps do not provide as much information as websites do, which makes them more user-friendly but less informative. In fact, the investors who prefer websites do so because of the amount of information that is available, while investors who prefer apps do so because there are less steps to acquiring information than when accessing a website.
There is actually a bit of a landmine involved in developing an app for financial advisors and providers. According to Spectrem’s study Using Social Media and Mobile Technology in Financial Decisions, investors want a library of information made available to them on advisor websites, including budgeting tools, retirement planning information, asset allocation details and portfolio specifics.
Because apps carry less information than websites do (due to limitations related to download technicalities), advisors must determine which information is best to make available on apps. The Spectrem study includes details on which devices investors must prefer to use when accessing specific types of data, so that advisors can see how they are accessing account balance information versus how they access articles or research on investment topics.
Top Takeaways for Advisors
In terms of information retrieval, there are now three types of investors: those who prefer hard copy publications (newsletters and magazines), those who prefer information on websites and those who prefer information be made available via apps. Advisors and providers must balance and distribute information in all three areas, understanding that websites can carry all the information they can produce, while apps are limited electronically and hard copy publications are limited by how much providers want to pay to publish them.
However, advisors must not only produce material for the apps some investor want, they must make sure they do not forget those investors who are not electronically savvy and don’t want to be. The Spectrem study indicates that 32 percent of UHNW investors do not use social media, and a startling 5 percent of UHNW investors who do not use a personal computer, and 17 percent who do not own a smartphone. Advisors cannot forget the tried and true methods of information dissemination while developing the newfound technology to reach modern investors.
©2017 Spectrem Group