Transparency, not low fees, drives consumer loyalty for digital wealth providers

While the strategic quadrant for Canada shows no features in the “Maintain” area, in the US, online experience is one area where digital wealth brands are performing well on an important driver of satisfaction. To win, brands in the US must continue to provide strong online experiences, while improving transparency and enhancing reporting options for clients.

Low-priority features in the US markets include service breadth and providing a human connection. These are both relatively unimportant drivers of satisfaction to US consumers, so firms should understand that improvements in these areas aren’t likely to translate into greater loyalty.

Finally, innovation and the mobile experience are two areas where US firms are over-delivering. Clients are very satisfied in each of these areas but neither represent strong drivers of satisfaction. As such, US firms should work hard to balance innovation with meaningful client/investor experience – simplicity can rule the day.

Fee transparency is a surrogate for trust

The common opportunity for suppliers of digital wealth advice in the Canadian and US markets is transparency. Given the close relationship of transparency to trust, and the fact that digital advising in either country is still in a relative period of infancy (compared to traditional forms of wealth management), ParameterInsights’ data shows that firms in North America still have room to grow when it comes to establishing a lasting and trusting relationship with clients.

Across categories and verticals, consumers are typically most satisfied and most loyal toward their most trusted brands. The digital wealth incumbents know that trust in large part is attributable to a brand’s longevity and ability to bounce back after major setbacks. Wells Fargo is in the midst of a brand recovery after their “fake account” scandal came to light. As the banking giant rolls out its hybrid Intuitive Investor offer, it will need to work hard over an extended period to re-establish trust, especially among its millions of Gen X and Gen Y clients. One way the bank is doing this is allowing clients of the digital advisory service to make unlimited calls to its advisory call centers.

Incumbents that have weathered previous storms know that digital wealth startups remain untested in downward markets. For incumbents and start-ups alike, however, it could well be that AUM proves to be far less “sticky” under less favourable market conditions.

In the meantime, data indicates that brands in Canada and the US would do well to engender greater fee transparency via easily understood and accurate reporting capabilities, which in turn provides a good foundation for building brand loyalty and trust over the long term.


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