A decisive shift will happen over the next few years towards a personalised financial advice model. Planning for it now is critical says our CEO, Andrew Walsh.

Microsoft’s Bill Gates said, “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten”.

It’s a point that has great relevance right now as financial advisers, brokers, wealth and investment managers assess their position for the long-term.

In an environment of constant change, upheaval and regulatory pressures, looking past the next 12 months might feel like a challenge, yet anticipating longer-term change is precisely what you need to do if you’re a business that wants to be well placed for the future.

When thinking ‘long-term’, we often assume that progress will happen in a nice upwards straight line. The reality is that’s rarely the case. There will be times when progress feels like more of a squiggle. What’s important is getting on the right path; having a clear vision of where you’re going, while being flexible and responsive to the challenges you encounter along the way.

A decisive shift

So, what does the future of wealth and investment management look like? As far as interaction with clients goes, the decisive shift over the next few years will be towards a personalised advice model. A hybrid approach, it combines human-touch with the best technology. Clients can choose to interact with their trusted adviser through digital means, face-to-face or a combination of the two.

It’s predicted that this will become the main channel for advice over the next two or three years. Globally, the pioneers of automated investment advice are already re-focusing their models by introducing human elements to their propositions, and we're seeing traditional human advice models increasingly adding digital services to their offerings.

As far as interaction with clients goes, the decisive shift will be towards a personalised advice model.

The perfect combination

Up until now much of the debate around computer-generated versus human advice has presented it as an either/or issue. Yet it’s increasingly clear that a blend of the two offer the best of both worlds, reducing costs for consumers while making professional advice and expertise more accessible.

While new ways of servicing clients might still feel distant, planning should start now. Priorities may need to be re-set, ensuring that short-term distractions don’t get in the way of long-term objectives.

Think strategically

Many of those distractions will come in the form of technology. It’s easy to adopt every new system that comes along, particularly if something looks faster, sexier, or easier. But the real benefits of adding new digital tools and systems are only felt when their adoption is part of a wider strategy – for instance, using data and connectivity to radically improve or introduce new standards and benchmarks in service that can be promoted to customers as competitive differentiation, while also enabling the business to operate efficiently.

The real benefits of adding new digital tools and systems are only felt when their adoption is part of a wider strategy.

The who, what, why, and how

This requires a long-term technology vision which starts by identifying the needs and gaps that a client-focused digital advice service can meet and fill, understanding what you can provide that is of genuine value to customers and setting out how you will get there.

How can you use technology to foster stronger long-term client relationships, improve client outcomes and give business a competitive edge in a world where clients are increasingly seeking – and valuing - the reassurance of human advice and the efficiency and convenience of digital delivery?

How will your business model and culture need to evolve in order to successfully implement such a proposition where technology dovetails seamlessly with other elements of the service?

Getting personal with a hybrid model: questions to ask:

  • What needs to change?
  • How do our service propositions evolve?
  • How can we respond to client enquries 24/7

It’s a balancing act

There is a need to maintain a balance between digital and traditional models. That may mean that while some elements of the business become automated, others do not. Operating a hybrid advice model requires additional flexibility, like the ability to customise services according to the nature and level of interaction that different clients prefer while ensuring profitable outcomes across client size and type.

It would be easy to fall into the trap of offering an advice service that ticks all the boxes but achieves neither the digital nor human outcome. There is a risk of investing in technology to deliver digital services but not in technology that enhances the human service.

Operating a hybrid model requires additional flexibility. While some parts of the business become automated, others may not.

In it for the long term

The technology is all there to make the hybrid advice model work. For firms heading towards this route, genuinely integrated systems that are fit for purpose over the long term will be even more important than they are now.

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