Only 39 per cent of high-net-worth individuals would recommend their current wealth manager, according to research by PwC.
The report stated the services many advisers and wealth managers offer do not live up to their clients’ expectations.
It found more than half of high-net-worth individuals surveyed believe it is important for their financial adviser or wealth manager to have a strong digital offering - a proportion that increases to almost two-thirds among those under 45.
But in reality just a quarter of wealth managers offer digital channels beyond email, prompting PwC to brand advice “one of the least tech-literate sectors in the financial services industry”.
The firms’ global asset and wealth management leader Barry Benjamin stated: “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 fintech incomers, 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.”
The research found 47 per cent of high-net-worth individuals who do not currently use robo-advice services would consider using them in the future.
Some advisers overestimated their firm’s digital capacity, claiming it was sophisticated when in reality it only offered a website.
Only one in 10 wealth managers used social media with their clients and many are only now investing in web portals and basic mobile apps.
Two-thirds did not consider robo-advisers a threat to their business and insisted their clients did not want digital functionality.
PwC’s UK wealth management leader Andrew Hogan argued technology will be vital to keep assessment of potential investments 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.”
The report drew on research with more than 1,000 high net worth individuals in Europe, North American and Asia with $1m (£690,000) or more in investable assets, as well as interviews with 100 relationship managers, chief executives of wealth management firms and fintech innovators.
Carl Melvin, director of Renfrewshire-based Affluent Financial Planning, said: “The firms that I know seem to be quite forward thinking and IFAs have proven themselves to be quite adaptable.
“Certainly we have invested a lot in trying to engage with our clients through technology, because it engages the client and it provides economies for the firm,” he continued, adding: “There probably are some older firms which are in denial about robo-advice.”