Using chat applications is one method that is increasingly used by millennials to discuss their investments with advisors.

Oliver Wintle, Associate Wealth Management Analyst at GlobalData, said: “One issue with ‘chat applications’ however, is that the wealth management firm does not own the data—the third-party messaging service does. In addition, if the advisor leaves the company so does theirconversation history with the client.”

However, email remains one of the key forms of communication between wealth managers and investors. In fact, the 2018 Mass Affluent Investors Survey suggests its use has been increasing: between 2017 and 2018, the proportion of investors communicating with their advisor via email form increased by 10 percentage points.

Wintle continues: “Despite this, email is not ideally suited to client-advisor communication. For instance,  if at any point the client clicks ‘move to spam’ on an email, all future communications will follow the same path and end up in the recipient’s spam folder—stripping a company of engagement with the client. Consequently, wealth managers should focus on other communication channels.”

There is willingness for investors to communicate with their wealth managers via chat applications. It is important that wealth managers embrace this change. To tackle compliance and data ownership challenges, they should seek to include chat features in their core online and mobile platforms. Partnering with third-party IT vendors such as ‘Moxtra’ may be one solution.

Wintle adds, “Wealth managers must make sure their chosen communication channels are not easily ignored by clients. Increased engagement will undoubtedly result in better customer retention—but also a higher level of client involvement with their portfolio.”

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