Client Portals: Are They Worth the Investment?

Sam Large, Mark Webb

Asset Managers are focusing on what their digital estate should include…

Asset Managers continue to invest in their digital capabilities. Our proprietary research shows that 79% of firms have this as a high priority agenda item. These plans have been given a significant boost by the current COVID-19 situation, making digital capabilities a “must have” rather than a “nice to have”…

Managers are seeing significant demand to surface content, data and functionality through digital channels. At the same time, firms are looking to promote offerings such as ESG, where digital & data capabilities are at their core.

This leads managers to look at their digital estate, and the routes by which they provide access to information & services. Online client portals (eg. secure online access to a site which provides client specific content/data etc.), have become a hot topic for managers, as they look to see if this is an effective way to meet these goals.

Asset Manager Client Portals have had a chequered past…

Client portals have been around Asset Management for over 10 years. There has been a mantra of  “build it, and they shall come” which has meant managers have invested considerable sums to build & maintain these applications. Many are basic: a far cry from the version provided by Retail Banks, and even further from the highly intuitive and personalised client portals that we have all become accustomed to in our daily lives today.

Some firms are seeing the client experience,  efficiency, and scalability benefits which portals aimed to provide. The more common story is of low client adoption, poor usability and costly technical development. Many are now expensive secure inboxes for housing .pdfs of client reports. This causes frustration for Digital & Client Teams. Despite the investment and effort, only 23% of firms think that they are delivering the digital experience that their clients are demanding.

This creates a dichotomy for managers. Firms want to create proprietary digital channels which provide Institutional & Wholesale clients with access to personalised and tailored content/data, as well as digitising various client services tasks. They fear disintermediation from providers who can aggregate this information from multiple managers, and avoid the thorny issue of multiple log-ins. On the other hand, there is intense scepticism of the value these platforms deliver, and the worry that something will arrive which leap frogs the need for client portals to exist

We see a role for Next Generation Client Portals

Given this dichotomy, the question about the need for a client portal is more nuanced than before. In our view, there are circumstances where there is a rationale for a manager to have their own proprietary portal. This, however, depends on the nature of the holdings, the segments served, and the Client Service Model. So, it is no longer a binary ‘yes’ or ‘no’ answer.

We also see that Client Portals can be provided (and maintained) more cost-efficiently with the available cloud-based technologies, and by moving to an Agile approach to development. This focuses on extracting most value from the client portal, based on meeting the needs of your customers. Alpha has observed that portals go hand-in-hand with the improvements which managers are making to their data capabilities,  and can make use the tooling and governance which comes from this.

What approach should you choose?

Our framework for helping make the decision is shown below. It includes…

  1. Get the foundations & enablers in place – irrespective of the route taken, firms will need to get a clear understanding of their client needs, and have data capability which allows access and analysis of data available to a range of internal and external stakeholders.
  2. Understanding the nature of your clients – the role of portals will be influenced by the nature of your client and the degree to which a proprietary portal will be beneficial. This is often dictated by the amount and % of holdings being managed.
  3. Defining the optimum interface/interaction – the nature of the relationship with your clients will dictate the most effective interface. This will highlight where a client portal would be beneficial or where disruption might come from.

These feed into the implications for the decision to build or to look at an alternative route. If the build route is chosen, we always advocate that firms take an agile approach to delivering a minimum viable product rapidly to adopt the mantra of “Think Big, Start Small and Scale Fast.” We think we will start to see the emergence of a new generation of client portals within the industry, providing clients with platforms that are more focussed on flexibility, on-demand access to data and enabling client self-service, a seamless experience.

How can Alpha help?

Alpha has a wealth of experience in helping clients to plan, design and deliver client-centric digital transformations. To find out more about our latest insights on the future of Client Portals within the Asset & Wealth Management industry, and how we are supporting our clients with these critically important initiatives, please contact us.

About the Authors

Sam Large
Senior Manager

Sam is a Senior Manager at Alpha, with significant experience advising asset and wealth managers on Digital and Distribution strategy. Sam has helped clients to reshape their client reporting and client service operating models and has also led a number of distribution technology transformations, including the implementation of CRM, client onboarding and marketing automation tools.

Mark Webb
Mark Webb

Mark has over 7 years in Investment Management, with experience in technology implementations, data systems and client experience design. Most recently he has worked to provide specialist market input through a client experience design programme at a global asset manager, and has successfully led the implementation of a Web Content Management system at a global asset manager which was successfully delivered under presentenced timeline challenges