Wealth management is one of the least tech-literate sectors of the financial services industry, and is falling well behind other industries, a report published today by PwC finds.

‘Sink or swim: why wealth management can’t afford to miss the digital wave’ draws on a survey of wealth relationship managers, CEOs, FinTech innovators and HNWIs across the globe.

The report concludes that what wealth managers currently offer is sharply at odds with what their clients - high net worth individuals (HNWIs) - expect.

Over half of HNWIs surveyed by PwC believe it is important for their financial advisor or wealth manager to have a strong digital offering – a proportion that rises to almost two-thirds among HNWIs under 45. 47 per cent of HNWIs who do not currently use robo-advice services would consider using them in the future.

The report finds that players in the wealth management sector seem to be oblivious to their technology inadequacies, with some overestimating their firm’s digital capability - rating it digitally sophisticated, when the only service offered to clients is a website.

A mere one in ten wealth managers employs social media with their clients and many are only now investing in web portals and basic mobile apps.

Two-thirds of wealth relationship managers do not consider robo-advisors a threat to their business and repeatedly insist their clients do not want digital functionality - directly contradicting the importance their clients place on it.

Barry Benjamin, global asset and wealth management leader at PwC, said: “This conflict within wealth management firms, combined with a client-base that feels only weak affiliation to its chosen providers, is creating a sector that is now acutely vulnerable, to digital innovation from FinTechincomers, including robo-advice services.

“Ignoring this state of affairs is not an option. If firms do not respond now, they simply will not survive in the medium to long term.”

In PwC’s view, to survive, wealth management firms must:

Andrew Hogan, UK wealth management leader at PwC, added: “Wealth relationship managers enjoy high levels of trust among their client base. They are already recipients of a depth and breadth of data and insight spanning both financial and non-financial aspects. Any future wealth management model needs, without question, to retain this human aspect.

“However, in an increasingly complex world where the investment office may, for example, have to evaluate more than 200 different investment products for a client, and where clients are also aware of what automated technology can do in the investment advisory space, technology will be vital to keep the job both do-able and scalable for a growing audience.

“Firms that embrace and seize the digital opportunity now are in a powerful position to deliver propositions of real and sustainable future value which combine the very best of technological and human capital.”