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2021 top trends in investment management

RingCentral for Investment Advisors


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Get ready to take on the top trends in investment management right now:

  1. Continued shift to the cloud
  2. Efficient client onboarding and communications
  3. New client opportunities
  4. Deeper engagement with clients
  5. Social media marketing
  6. Robo-advisors

Even though it’s just the second quarter of 2021, some clear investment management trends are already emerging. Although many of these trends have been influenced by the events of 2020, they are likely to have an impact on the future of the investment client experience for the foreseeable future.

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Trend 1: Investment management continues to shift to the cloud

Consultants at the Aite Group have seen an increase in the use of cloud technologies in the investment management space. This trend stems from regulators’ growing acceptance of the cloud as well as a string of successful deployments.

What use cases are a good fit for the cloud within an investment management firm? One use case is a cloud communications platform. We’ll illustrate with a real-life example.

EP Wealth Advisors, an investment advisory based in California, implemented RingCentral’s cloud communications platform to improve client communication and internal collaboration. Clients can now quickly connect to their advisors, wherever they are, and all the advisors are using the same cloud communications platform, making it easier for the IT department to manage. The increased efficiency is saving the advisory 20 percent annually, and even better, features such as RingCentral’s cloud video conferencing service are helping the advisory in another essential way. Aaron Solorzano, IT Manager for EP Wealth, explains: “Robust webinar functionality helps us further cement the trust we are building with our clients.”

Trend 2: Efficient client onboarding and communications

Take a moment to think about how long it takes to onboard your clients. Maybe you don’t have a specific timeframe in your head, but you know that it takes too long now. Research suggests that manual onboarding can take anywhere between two and 34 weeks to initiate, and a Kofax report says the average onboarding time for clients with high net worth is 41 days.

When you make client onboarding and communications more efficient, you improve the client experience. That’s a significant reason to invest in the right technology. A cloud communications platform plays a crucial role in the client onboarding and communications process; it enables you to reach out to clients easily, and it makes collaborating with others seamless so you can quickly onboard clients.

This is especially important at a time when many clients are engaging with their investment advisors virtually rather than in person. Virtually onboarding clients adds a layer of complexity to the process. It is not unusual for the advisor to need to communicate with the client, mid-office support staff, compliance personnel, and product experts as part of the onboarding process, especially when onboarding exceptions occur.

With the right cloud communication platform, these obstacles can be met head-on. For example, suppose an advisor is conducting a video meeting with a client as part of the onboarding process. If the advisor needs to quickly include someone from the mid-office staff in the meeting, it is easy to do with the right cloud communication system. Suppose the advisor wants to ensure that all disclosures are properly executed and all compliance regulations regarding the recording of client communications are met. That, too, is easily accomplished with the right communications platform.

Trend 3: Advisors look at new client opportunities

Client demographics are changing as Baby Boomers age and their Millennial children inherit their wealth. Yet, advisors can’t rely upon their clients’ children for their business. In fact, analysts estimate that anywhere from 65 to 95% of clients’ children fire their parents’ advisors because the advisors have never bothered forming a relationship with them. Advisors can’t take it for granted that their clients’ children will automatically do business with them because their parents did.

To forge a relationship with Millennials, advisors must understand Millennials’ preferred communication channels. Research published by the Spectrem Group in November 2020 revealed the following data:

  • 24% of Millennials prefer phone calls
  • 14% of Millennials prefer videoconferencing
  • 7% of Millennials prefer a text message with a link to more information
  • 7% of Millennials prefer webinars

Investing in a cloud communications platform gives advisors the flexibility to accommodate Millennials’ preferences. A cloud communications platform offers video, telephony, and texting capabilities so advisors can reach out to Millennial clients via their communication channel of choice.

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Trend 4: Deeper engagement with clients

2020 was a rough year. A client didn’t have to be directly affected by the global health crisis (losing their jobs, for example) to feel fear and uncertainty about what would happen to their investments. They wanted their advisors to understand those concerns when making investment decisions.

As a result of those sentiments, going forward, advisors will have to engage more deeply with investors if they want to keep their business. They’ll need to understand what’s going on in clients’ lives, not just what’s happening with their portfolios.

A cloud communications platform helps advisors deeply engage with clients. With capabilities such as screen sharing, telephony, video conferencing, and chat, clients can share the information they need to give advisors a more complete picture of their needs, concerns, and personal situation.

Trend 5: Social media marketing

At the beginning of 2021, the SEC loosened rules regarding the use of client testimonials in online client communications. This change will make it easier for advisors to do two things:

  1. Solicit client testimonials through social media
  2. Utilize client testimonials in social media marketing

Social media marketing creates enormous advantages for advisors: those who use social media marketing increased their AUM by $15.3 million between 2018 and 2019. How can advisors easily solicit testimonials through social media? The answer lies in a cloud communications platform.

A cloud communications platform integrates with social media platforms. It’s easy for clients to open a chat window to share their thoughts with advisors. Because cloud communications platforms integrate with your CRM, you can easily track communication with your clients.

Trend 6: Robo-advisors

Experts in the investment advisory space estimate that in 2021, the robo-advisor market will finally break through to over $1 trillion in AUM. This is bad news for human advisors because it represents a loss in clients.

Investors have been increasingly turning toward robo-advisors for about a decade; their experience with the 2008 financial downturn soured many on using traditional advisors. They felt that advisors placed profits over their clients’ best interests.

A cloud communications platform helps build clients’ trust

How can advisors win back clients’ trust? The answer lies in building strong, trust-based relationships in which the advisor demonstrates that the client comes first. One of the tools an advisor can use to build trust is a cloud communications platform.

Proactive communication is a significant part of building trust, and when advisors take the time to learn about investors’ preferred channels, investors trust their advisors more. A cloud communications platform allows advisors to connect with clients through their preferred channel. Then, a cloud communications platform that integrates with CRM solutions and other interoffice systems enables an advisor to keep track of what is happening with each client. An informed advisor is an advisor who is well equipped to build investor trust by reaching out at the appropriate times with the appropriate messages on the appropriate channels for each client. That level of personal care is a differentiator that can defeat the robo-advisor incursion.

RingCentral for Trusted Advisors
Transform your investment advisory business with secure cloud communications

RingCentral’s cloud communications platform helps you stay on top of trends

RingCentral’s cloud communications platform provides your investment advisory with the tools needed to effectively and efficiently build investor trust by creating a better client experience at every communication touchpoint. Stay ahead of investment management trends with RingCentral’s cloud communications solution for investment advisories. To see it in action, request a demo today.

Originally published Jun 07, 2021, updated Dec 30, 2022

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