A Critical Intersection of Trust, Tech and Human Expertise in Wealth Management

The wealth management industry stands at a pivotal intersection where trust, technology and human expertise converge. According to our 2024 Investor Brand Builder report, while trust in the financial investment community is at an all-time high (66%), only 50% of advised investors now accept financial advisor recommendations without independent validation (down from 56% in 2023). Moreover, three in ten affluent investors are using AI to inform investment decisions, signaling a fundamental shift in how investment guidance is consumed and validated.

A Transformative Evolution

Several market dynamics are occurring simultaneously to make this intersection of trust, technology and service-driven human expertise a pivotal moment in wealth management.

Trust and service rise in importance as intertwined drivers of consideration in 2024.

• Is a company I trust rises in importance for both distributor firms (from #4 to #2) and ETF providers (from near-bottom to middle) while remaining among the top of tier 2 attributes for mutual funds.
• Best-in-class service and support emerges as the top consideration driver for ETF firms, and rises to #4 for distributors, while remaining at #4 for mutual fund firms.
• Client loyalty (NPS) simultaneously rises across all provider categories, which, together with the rising importance of service and trust, underscores that better client service helps drive higher trust.

Trust combines elements of human expertise (traditional advice) and technology (AI and robo-advice).

Consequently, the future of trust involves a hybrid model with traditional advice and AI tools serving as complementary rather than competing channels.

The increase in trust in the investment community is led by traditionally advised investors (from 64% in 2022 to 70% this year).

At the same time, the traditionally advised (34%) are more likely than adviced (28%) and self-directed investors (27%) to use AI for investment decision-making.

More than half of advised investors validate recommendations through independent research.

Hybrid advice models have gained prominence, with 65% of robo-advisor users and 57% of likely adopters valuing human expertise alongside digital tools.

Financial stability emerges as an increasingly important foundation for trust.

• Financial stability rises from seventh to third as a distributor firm loyalty driver, while rising from second to first for mutual fund firms and fourth to third for ETF firms.
• Financial stability is strongly correlated with trust for both ETF and distributor firms.

With all these dynamics at play, success in the coming year will depend in part on wealth managers’ ability to:

• Deliver hybrid experiences that embrace the “trust but verify” dynamic.
• Build trust through enhanced performance metrics and consistent performance.
• Leverage AI and digital tools as enablers rather than replacements for human expertise.

Investor Brand Builder™ is designed to support subscribing firms with critical decision-making information in the areas of competitive positioning in a dynamic business environment, developing sophisticated targeting through advanced investor segmentation and uncovering opportunities to strengthen brand equity among key segments and influencers.

As such, Investor Brand Builder provides a holistic overview of key trends and insights affecting the affluent investor market including an in-depth focus on investors with purchase intent, a comprehensive and competitive evaluation of brand health to improve marketing and communication, and identification of opportunities to grow market share and boost profitability.

To learn more about the full report, click below.