The new era of digital empathy in wealth and investment management

The new era of digital empathy in wealth and investment management

Investing is often where the outer limits of left and right brain skills come together, left with quant-based activities, right with relationship management with investors or stakeholders.

In the more traditional fund based world quant-based work was largely focussed on quantified research and modeling within mandates of a fund, and the relationship management (once the money was in the fund) was a combination of showing fund performance, supporting fund commentary and using these in relationship management of the investors or stakeholders. The sales process of the fund was all about impressing the investors or stakeholders and leveraging the past performance, brand, or whatever methods to encourage investors to place their monies in the fund.

What is emerging in a world of increased consciousness and digital connectivity is something quite different, and I suspect this shift to increase over time.

At a retail level, wealth managers are increasingly recognising that it is not just about the value of investments. It is about how investing occurs (and down to the level of granularity of every investment decision) in the context of the investor, and this context is not just about financial value, there are tax considerations, investor specific nuances, rules, emotions involved here.

At a wholesale level, trustees or fund managers are also increasingly being influenced, prodded, encouraged, or even lobbied by investors / members about the nature of investments that are in the funds that they have invested in or subscribed to. Whilst consumers ultimately have the ultimate choice, in a world where moving monies can be difficult and / or expensive, expectations on those who oversee monies for large groups of people are increasingly having to be responsive to the feelings and viewpoints of members. We have seen some recent high profile cases where members of a super fund in Australia took out a full page ad in the leading newspaper to express their views to the trustees !

These trends ultimately impact the scope of both left and right brain considerations when making and delivering information about investing decisions at an individual or collective level, and this means the evolution of a new range of key processes and information systems to support this both retail and wholesale / institutional.

If this rings a bell with you and you are wondering how to achieve this, contact me at Stuart.holdsworth@financialsimplicity.com

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