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Investor needs redefined – the gold standard of data

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This is a sponsored article from Refinitiv.

With market volatility and the ongoing uncertainty around COVID-19, wealth managers are under pressure to stay relevant by delivering an engaging client experience and helping investors make sense of fast-moving markets. A new survey by Refinitiv, an LSEG business, explores the changing digital demands of investors, and finds that market leading data and analytics can help wealth managers to differentiate themselves and stand out from the crowd.

Refinitiv’s latest global research report, The Gold Standard of Wealth Management: Redefining Investor Data Needs, examines how investors trading activities, data needs and digital expectations are evolving and delves into the critical role that data and analytics will play in a post Covid-19 world.

Having surveyed over 1000 self-directed and advisory clients globally, around 50% from APAC, the report highlights how the uncertainty and volatility of the pandemic impacted investors’ expectations, with more demanding increased client engagement and a growing appetite for advice, data and analytics. Investors are looking for a multi-channel digital experience that not only provides comprehensive data but helps them understand and manage that data to positively influence their investment decisions.

For digital wealth providers, these insights provide a useful glimpse into the minds of their clients that can enable them to address current data gaps and build fit for purpose digital platforms for the future.

The growing need for data

One of the key findings of the report is that clients’ needs are rapidly changing, and that investors across the board require new data and digital capabilities in order to maximize opportunities and mitigate risks. However, the survey results revealed that firms are not keeping pace: 39% of investors do not feel adequately equipped with the data and content they need to make optimal investment decisions.

Respondents also expressed an interest in being able to access a range of multimedia content, such as webinars, videos and podcasts. Wealth managers will in future need to integrate high-quality data into multimedia content that can inform a broad mix of delivery channels.

From a data perspective, while standard pricing data remains key, alternative sources of data are increasingly providing a fully rounded context, especially during the heightened volatility of the last 12 months, and we see a clear growth in demand for ESG indicators, news and social media analytics.

Environmental, social and governance (ESG) investing

ESG investing continues to grow in popularity, even though access to quality ESG data remains a persistent hurdle.

A substantial 34% of respondents globally are more interested in ESG investing now than they were six to twelve months ago. Drilling down, millennial investors are strong drivers of this trend, with 61% more willing to invest in ESG now.

In order to maintain this momentum, providers need to deliver accurate, transparent ESG data that offers sufficient coverage to allow investors to benchmark companies and make meaningful comparisons.

Underlining the need for transparency is the fact that 24% of respondents cited greenwashing as a barrier to ESG investing.

Wealth providers should also make ESG data visually appealing and easy to consume, since ESG data and analytics are essentially “new” to many investors.

Alternative data a “game changer”

The survey found that investors are data-savvy, with many navigating multiple sources of data during the investment decision-making process.

While trusted data is a key requirement, powerful analytics that make sense of the data are invaluable. Alternative data – such as news analytics, product reviews, website activity, internet forums, and real-time ESG signals – is considered potentially “game changing”.
Over half (54%) of respondents agree that news analytics would be useful when making portfolio management decisions.

News analytics enable investors to pinpoint actionable insights from news sources through the use of tagging and metadata, allowing them, for example, to spot highly relevant and timely content, measure sentiment or forecast default risk.

A new approach

As the world adjusts to a new normal and optimism for a recovery grows, the increased appetite and need for data experienced during the pandemic are likely to have lasting consequences. Wealth managers will need to adopt a new approach, one in which they fully appreciate that investor needs and expectations have been transformed, alongside changing investment approaches.

Forward-thinking managers should focus on delivering content based on powerful data and data-driven insights. Not only will a new approach such as this enable investors to optimize their decision-making capabilities, but it will also help wealth managers to differentiate themselves, remain relevant and deliver a positive customer experience.

Download the full report to discover all the insights from over 1000 investors

This is a sponsored article from Refinitiv.

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