The “Avaloq wealth insights 2024” report provides a comprehensive analysis of the current investment landscape, drawing on original research from two unique surveys conducted by Avaloq. These surveys gathered insights from more than 3,300 investors and wealth management professionals across Europe, Asia and the Middle East. This blog post highlights the key findings and trends from the report at global level, offering valuable insights for investors and wealth managers alike.
Key findings
Investor behaviour
Despite a challenging global economic environment, 74% of investors have maintained their investment approach over the past year. Interestingly, 36% are adopting a more aggressive investment strategy, and 62% favour a self-directed approach to portfolio management. When it comes to why people invest, growing their wealth and funding their retirement plans come out on top with 62% and 47% respectively.
Asset allocation trends
The research indicates a notable shift in asset allocation preferences among investors compared to 2023. There has been a 21-percentage point increase in the number of investors holding equity and stock investments, while real estate investments have also risen by 12 percentage points. In contrast, interest in crypto and digital assets has declined by 12 percentage points.
Communication preferences
Investors are now placing a greater emphasis on the quality of communication with their advisers, with 31% prioritizing clear updates. The importance of rapid response times has diminished, with only 14% expecting replies within a few hours, compared to 35% in 2023. Additionally, the frequency of communications has decreased, with just 12% receiving weekly updates, down from 38% last year.
Figure 1: Elements for trust in advisory
Q. How important is each of these elements for establishing trust in your adviser?
Trust in advisers
A majority of investors still turn to industry professionals as their primary source of financial information, with a notable 57% consulting them regularly. This trust significantly surpasses reliance on public figures and social media, which stand at 29% and 23% respectively. Investor loyalty has also increased, with only 7% considering a switch from their main financial institution, compared to 24% in 2023.
Challenges with current technology
On average, industry professionals typically use four to six technology systems and applications, largely in line with 2023. Nearly two-thirds indicate that these systems are not fit for purpose, highlighting issues with navigation, integration and unnecessary functionality. Furthermore, poor scalability is an obstacle to personalized client advisory services for 38% of respondents, while 41% report difficulties due to the inaccessibility of client data.
Figure 2: Professionals’ views on current technology systems and applications
Q. Which of these do you feel apply to your current technology systems/applications?
Usability concerns with advisory apps
Additionally, 78% of industry professionals do not use their investment advisory apps in live client meetings due to poor user interface design. Furthermore, 65% find these apps too confusing or challenging to use with clients, creating a barrier to effective client interactions and satisfaction.
Importance of AI and automation
Technology is becoming more important, with 80% of industry professionals expecting that artificial intelligence (AI) will change the way they perform their jobs and 82% believing it will benefit the industry. However, they also feel that automation is not being implemented quickly enough to support their work. Additionally, 68% indicated that automating client onboarding would be a significant improvement, while 64% expressed a desire for automated regulatory checks.
“Generative AI empowers the financial sector to harness unstructured natural language for sustained wealth creation. Its adoption for critical applications requires transparency, explainability, and safety without compromising accuracy. ”
Roberto Baldessari, General Manager, NEC Laboratories Europe
Opportunities ahead
The research indicates that while there has been an increase in client satisfaction with digital experiences, for example, there is still significant room for improvement in optimizing the client journey. Banks and wealth managers need to focus on further automation, enhanced data analytics and the integration of improved technology to better serve clients, especially as digital natives enter the investment landscape.
To meet evolving client expectations, financial institutions should adopt technology-driven, data-enabled business models that prioritize client-centricity. This includes modernizing the front office, safeguarding backend stability and providing timely, clear communication on preferred channels. By addressing these gaps, institutions can ensure a future-ready investment advisory and management service.
Access the complete report and further insights
For an in-depth analysis and additional insights at both regional and country levels, download the full “Avaloq wealth insights 2024” report now to learn how you can leverage these trends in the wealth management industry.
