Seasoned wealth managers will often highlight that metrics and analytics do not resonate with their clients. Instead, good advice should be provided based on deeper discussions with clients about their goals and interests. Some aid these conversations by sketching easy-to-understand visuals and telling simple explanatory stories that are informative and supportive – others find alternative methods. But in short, every investor’s needs are different. However, the last decade has been punctuated by numerous regulations, bringing in restrictions and a focus on the use of risk-based portfolio theory. While these measures are all for good reason, the result is often a somewhat technical discussion with the client about product risks and suitability based on a standard list of questions and data points. It frequently leaves little time for empathy, understanding of needs, and real relationship building. Moreover, as the demand for wealth services increases, and product and client diversity broaden, the challenge of building strong relationships will only become more difficult.

Meanwhile, with so much information and analysis available digitally online, some are asking whether today’s investors have enough financial literacy to deal with the financial decisions themselves, without the need for such a high-touch advisory relationship.

Investor financial literacy remains high and digital literacy has accelerated at a faster pace than expected

The core investor community which wealth managers are serving in developed economies are represented by the so-called Baby Boomers and Gen-X. The much talked about great wealth transfer, expected to take place over the next two decades, will shift an enormous amount of wealth primarily to the 50+ age group. This could be as much as $31tn in investable financial assets in the US alone¹.

The majority of this group are both digitally and financially literate. Indeed, previously held beliefs that the older generation are less digital or that the mass affluent segment is less financially aware seem to have diminished rapidly (see ThoughtLab Wealth and Asset Management 4.0 study)². The impact of both social media and the internet is that by the time a client talks to an advisor, he or she has probably already narrowed down their choice of investment ideas and themes to some extent.

Find out more about digitalization of investor lifestyles in ThoughtLab Wealth and Asset Management 4.0 study.

Indeed, consistent surveys have shown high levels of financial literacy in most developed economies³ ⁴. Unsurprisingly, there is a strong correlation between the GDP per capita and financial literacy. Furthermore, financial literacy amongst the core 50+ investor age groups are amongst the highest (scores in the US are consistently over 50%): the older you are, the more financial literate you are.

However, the issue that these surveys frequently highlight is that very few people score very high marks (i.e., above 75%) - and that there are many groups within developed economies who do not score well at all: these include female populations and ethnic minorities. The periodic TIAA survey³ in the US also shows that there appears to have been little or no improvement over recent years.

The rise of the self-directed investor

Clearly the level of perceived financial literacy, and the search by investors for choice and opportunity, has led increasing numbers of investors to not only self-manage their direct investment portfolios, but take on the management of investments in more advanced vehicles – such as long-term tax wrappers, investment bonds and life insurance policies.

One only has to look at the phenomenal growth over the last decades of the Direct-to-Customer (D2C) platform plays from the likes of Vanguard, Abrdn and Schwab to understand the number of people who have taken self-management to a new level. Aité estimated that the D2C market size could reach $1.2tn in US alone by 2024⁵.

However, with highly regulated pensions and long-term savings potentially at risk, regulators and industry experts are sounding alarms. The need for proper quality advice and due diligence is of paramount importance.

In response, many investment advisors and brokers are adapting their client’s digital onboarding and servicing models by using a blend of human high-interaction points and more passive social technologies to move clients along their investment journey – effectively a highly targeted hybrid-advisory experience.

Leverage technology to bring empathy back into client experience

Digital advisory technology is being used to bridge the gap to regulatory compliant advice and high-touch custom relationships. It ensures expensive advisor time is minimized but brings investors along the financial learning and compliance curve.

The common element is that the firm is working with the client along a journey with a low-touch digital experience that keeps the client engaged with the firm during all their investment decisions. Potentially this journey is interspersed with educational tutorials and tips to help fill the knowledge gap. Based on their profile and their interests it guides them to collect their own thoughts before channeling them to the direct support of an advisor when needed.

Often wealth firms are building this journey by making use of an API-driven ecosystem of apps, which it builds into the overall experience, and allows customization for different user segments and interests.

Moreover, when it comes time to onboard the client to the product or service, the client has a seamless journey and data is captured in the downstream systems efficiently — and critically, the requirements of compliance are fully met.

Some of the tools and technologies that we see being implemented are highlighted in figure 1 below. While they may not all be new methods, the way they are being implemented as early-stage client and product onboarding services, or to flag-up to the advisor when direct ‘physical’ advice is required, often is.


Figure 1: Exploit digitally powered interactions

 “It is time to drop the investment jargon and make clients’ investment journeys positive experiences that support the human decision-making process: visual, simple, and empathetic — and in tune with the needs and desires of an increasingly sophisticated investor." 

The role of the trusted advisor returns 

Good advice should be provided based on deeper discussion with clients about their goals and interests. Spending time with compliance checks, form filling and administrating accounts needs to become a thing of the past. With the right platform tech, advisors can tap into the growing self-service market, and deliver critical advice when it matters.

The role of the advisor should become one of a sparring partner; sometimes educating, sometimes challenging, sometimes just providing a sounding board — but ultimately bringing the client to a final decision point on some of the most difficult and critical decisions of their life. Indeed, it is an imperative with down-turning or volatile markets, that advisors are in a position to support the investor in overcoming the classic investor biases and behavioural errors of judgement that self-management is frequently prone. Smart technology must be used to free-up time and avoid an admin- and compliance-led advisor relationship, not to circumvent critical life-changing decisions. 

Find out more about digitalization of investor lifestyles in ThoughtLab Wealth and Asset Management 4.0 study.


1. Forbes, 2019, 

2. ThoughtLab, 2021,

3. TIAA, 2022,  

4. FT, 2021,

5. Aité, 2020,