Despite the emergence of new digital players and Fintechs, traditional investment service providers (i.e. banks and private banks) continue to serve a vast customer base in BelgiumAre they providing the bespoke offerings today’s investors are looking for? Should they feel confident in their strong market share or are they out of step with fashion?  

To find out, Accenture increased the scope of its annual Market Pulse Survey in 2020 to also look at Belgian investors’ experience of their current providers and to gauge their future expectations.

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We questioned +1000 Belgian investors, targeting a representative sample including the full range of smaller to high-net worth investors.

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In this article, the first of four, we share our main findings. In subsequent articles, we will dive deeper into these findings to offer more insights that can help investment service providers take action. 

 

Loyalty under threat in times of changing fashions 

Our survey reveals that Belgian investors are beginning to experimentespecially younger generations, and are trying out new providers to see if they cater better to their needs (45% have two or more providers). Some investors are actually leaving their main provider:

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7%

per annum changed main provider over the past three years

15%

is planning to leave their main provider in the near future

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The reasons for staying or leaving are diverse and often of equal importancemaking it difficult to please everyone’s tastes. This makes it easier for new entrants (e.g. Fintechs or GAFAs) to target a specific segment of the market. Even if clients do not switch main providers, new entrants could still hit (private) banks top line growth by reducing their capacity to cross-sell.  

 

The tailor still wins hearts

Traditional investment service providers have one important card up their sleeve. Belgian investors still value the personal relationship they have with their financial advisor, which often spans several generationsThis is a clear differentiator between traditional players and pure digital players, which often focus on lower fees, but offer no/limited personal advice

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56% 

of respondents to our survey rely most on their financial advisor to make their investment decisions.

 

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But there is room for adjustment

Today’s investors can no longer be described as homogenous. Their individual interests and needs are becoming more important when it comes to investment choices (see below)This translates into a need for more personalized advice, offerings (products and services) as well as distinct servicing preferencesall top drivers for staying or leaving a current provider.

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It appears that traditional players have not yet caught up sufficiently with these requirements.

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For example, 29% of respondents believe their provider does not contact them enough and 26% have never been contacted. The younger the respondent, the less connected they feel with their financial provider. However, capturing the desires and needs of this younger digital-native customer base is crucial given the wealth transfer from baby boomers that will happen in the next 10 years.  

 

Hyper-tailoring to fit the individual

Banks have traditionally put their investment products at the center of their sales strategy, based on the assumption that clients will see value in proven one-size-fits-allprêt-à-porter solutions per wealth bracket. However, our survey confirms that this model is becoming outdated and being inversed more than ever towards client centricity and hyper-tailored offers and advice. As already mentioned, investors have become increasingly diverse and want to be offered products and services that they feel suit them.

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Our survey shows that currently, only 50% of Belgian investors believe that their advisor proposes a sufficiently broad range of products and services.

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(Private) banks should take note and re-evaluate their current offering. This includes infusing more (often digital) solutions that appeal to modern-day investors. Personalization remains important, although rather than overwhelm customers with options, banks would do better to ensure each target group is offered the specific services they crave. 

 

Ethical investing more than a fashion statement

Today’s consumers are said to be increasingly guided by their moral compass when making purchasing decisions. Although this trend has not yet fully translated into a boom of the Environment, Social & Governance (ESG) investment products segment, a quarter of Belgian investors do see themselves purchasing ESG products in the near future. larger portion of investors (some 41%) are undecided due to perceived problems with ESG, including lower return on investment and greenwashing. However, it is only a matter of time before ESG becomes mainstream. Banks that are ill-prepared for this, risk missing out on an important opportunity to serve a new generation of socially aware investors. Informing their clients correctly about ESG products and performing due diligence on these products to remove the perception of green washing could help to address this. 

 

Digital haute couture

It’s clear that investment service providers should continue using their biggest asset, the personal advisor. However, they should also be expanding that valued personal advisor experience across all channels. They can do this by leveraging all the digital solutions available, from video calls to online chat and self-servicingOur survey shows that investors see self-service solutions (e.g. for opening an account, checking portfolio status, and buying or selling shares) as complimentary to their advisor, but in no way a replacement

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66%

of respondents stress they still want human support when needed, even when using self-servicing solutions.

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What all these digital solutions can enable is a more regular follow up at the right moment by the advisor, which can contribute to investors viewing their advisor as more of a trusted ‘coach’ than a salesperson. Innovative technologies such as robotics or AI can also bring value in the traditional investment industry by enabling providers to serve a broader range of client segments at scale while generating cost efficiencies. 

To strengthen their market position and deliver the bespoke offerings and advice modern-day investors are looking for, (private) banks need to reinforce what they do best and address their weaknesses. We will explore how in our next articles! 

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The article has been co-written by Jamel HachmiMichaël Versyck and Lorenzo Facq

 

Jérôme Lejeune

Managing Director – Capital Markets Strategic Deals, Europe

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