I’m attending the CFA Institute Annual Conference here in London, and one presentation really caught my attention today. Jane Henshaw, head of digital research at Vanguard, shared her team’s research on digital financial attention. This research uses three sources of data: web data from Vanguard’s large base of 8 million customers across retail and defined contribution plans like 401(k)s, Google Trends, and some brain science. This rich data and analysis have three takeaways for investment and wealth management firms:
- We can do a lot better at engaging investors. Considering the high stakes involved (the median account value for Vanguard’s digitally registered customers is $84,191), investors pay surprisingly little attention to their money. Some 30% didn’t log into a Vanguard platform even once between 2015 and 2017 or were not registered for digital services. The median retail investor logged onto his or her account six days per year, while the median DC-only investor logged on only three days per year. Forrester’s new investor segmentation shows that 6.8% of US investors are disengaged. These investors are more likely to be female, have few assets, and have a 401(k) as their only investment product. The industry hasn’t done very well at engaging these customers, and it seems that robo-advisors, including the ones dedicated to women (e.g., Ellevest) aren’t enough to change this. Personalization, nudges based on behavioral economics, and more scalable human/machine propositions are the solution.
- Investment firms must increase their mobile effort. At Forrester, we have long talked about the huge opportunity that mobile presents. But as the Forrester Investing Wave™ shows, mobile investing apps of major firms aren’t very impressive. While fintech firms such as Acorns or Stash prioritize mobile experiences, traditional investment firms often don’t prioritize mobile, thinking that their older demographic with complex financial needs prefer online or in-person experiences. Well, Vanguard data shows this isn’t very forward-thinking. Vanguard is seeing financial attention on desktops declining by 2% to 3% a year, while it’s growing by on average 15% or higher for mobile apps. While Millennials may have the highest adoption of mobile investment apps (50% for the 25–34 age group), investors who are 55 or older actually spend a lot more time accessing investment platforms on mobile devices (more than 120 minutes a year). This doesn’t mean you have to build an app, but you can’t ignore mobile. You can use Forrester’s Mobile Mind Shift Index to help you determine the right mobile strategy for your firm.
- It’s just a matter of time before virtual assistants become our financial advisors. Most financial advisors don’t fret about their jobs being automated, arguing that the technology is too immature to provide a personalized and emotionally rich experience. But customers don’t seem to care. Vanguard’s analysis of Google Trends shows just how many people are asking Google whether they should sell or buy stocks, how much they need to save to be able to retire, or — the most popular query — whether they can quit their job. So yes, as I explore in my latest report, robo-advice technology is still mostly limited to single products such as investment portfolios or life insurance rather than holistic financial advice. But the demand is there, and it’s just a matter of a few years before virtual assistants can engage investors effectively.
Tomorrow I will be presenting on the future of investor experience and some of the technologies that can help firms drive investor engagement. Looking forward to engaging with you at the CFA Institute Annual Conference or virtually!
 Vanguard defines financial attention as the act of paying attention to one’s finances.
 This share goes into double digits in countries such as Russia or the Netherlands. These investors may not be doing research, do not make decisions on their own, and do not rely on advice from financial professionals. Source: Forrester Analytics Consumer Technographics® North American Online Benchmark Survey, Part 1 (2019).
 Some of this is captured in the book The Mobile Mind Shift: Engineer Your Business to Win in the Mobile Moment, written by my colleagues Julie Ask and Ted Schadler.