blog from We are you

The financial advisor’s place in the digital world

By Annelie van den Boomen, Business Developer Investments, Virtual Affairs

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by We are you
| 05/07/2019 06:00:00

Effective hybrid wealth management is all about making conscious choices throughout the entire customer journey and smart decisions when it comes the business model, says Annelie van den Boomen at Virtual Affairs.

The past years, some institutions have embraced robo-advice and have seen it as an opportunity to be the first to perfect this proposition, some have stayed away from it, considering it a threat to the investment bankers’ profession. But consumers have very specific behaviour when it comes to deciding on things with a high financial impact.

IKEA, global brand and master in the art of offering just enough for the minimal price, offers a digital environment for their customers to design, simulate and order the perfect kitchen to the detail. Yet the IKEA stores have consultants to guide the customers through the ordering process and finalize the sale. When it comes to big impactful decisions, consumers want a specialist to validate their decision or give their expert opinion.

Digital interaction can replace much, but it can’t replace the emotional impact of an in-person expert view yet.

So how can you enable hybrid advice in a cost-effective way? In-person advice is feasible for the high net worth clients that offer the management of (a part of) their wealth to a financial advisor, but the mass affluent is not served with the high costs that come with it. We have seen many big and small investment brands struggle with this question. Initiatives like Peaks, Munnypot, Prospery and others have taught us valuable lessons about successfully delivering hybrid propositions.  

Personal does not equal in-person
Aside from robotization of interaction and gamification, personalization of the digital interaction can help. It can improve both the emotional experience for the client and the conversion of the interaction. Limit options for follow up tasks based on the client specifics, make sure questions are personalized to the client’s context to help them understand the question better. Good digital onboarding includes integrations with CRM but also with tooling that allows for identity verification and digital signing. When onboarding and KYC is facilitated in the digital system, it frees up time for actual advice in the in-person interaction. 

Align systems for advisors and clients 
Make sure all the information the client has, is also available for the advisor and vice versa, equally visualized and easy to understand. It supports the advisor in his role and makes sure the client doesn’t feel like the advisor has different or more detailed information, thus undermining the client’s sense of independence. Having an almost identical interface also helps when screen sharing, since it contributes to both the corporate identity and the understanding of the client of what he or she is looking at. Define the banker needs to the portal as soon as you define the requirements to the MVP (minimal viable product) so you can either:

  • Make these available for the consumer as well or;
  • Position this in such a way as not to confuse or distract the client

Don’t waste time repeating the context
The client has already started his journey when he decides to include the banker. By integrating the right systems, you can make sure to have that context available when the client calls, chats or emails. This saves time and thus costs and it prevents frustration.

Connecting all systems and including smart solutions, like context recognition, enables a truly seamless experience.

Let digital work for the advisor
In some cases, we have seen that digital behavioural data and the personal data of clients can even trigger the advisor to get in contact with the client at the right time. If, for example, a client is looking at a mortgage, seems like a good time for his private banker to contact and advice that client.

Set up the right business model and value proposition
Think carefully about what services to offer for free and what services are paid for. Great propositions have failed because their free proposition was just too good to move to the paid one. In doing so, be ultra-critical about your critical client base and minimum AUM. When you’re dealing with micro-investments you need big client numbers. Make sure you address a market that can facilitate those numbers and make sure you have semi-permanent income to cover your non-scalable costs. 

Think twice about your design
Startups generally come from a belief the proposition is very different from the competition. But that does not mean every little aspect of your interaction needs to be new, different and disruptive. Don’t re-invent the wheel and buy available components rather than make them. Test the foreseen solution with your potential clients with a mock-up of the solution. Stop thinking for your clients, start asking! Preferably do a Google design sprint before deciding on the solution.

Perseverance is everything
Even the best designed solutions take time to gain momentum, at least a year, usually more. If you are prepared to give it that time, energy and budget, your hybrid advice can be successful. As long as the in-person interaction is not considered to be the safety net for everything that is poorly engineered in the digital interaction. When hybrid advice is carefully and consciously designed for the in-person advice to be the ultimate service, it can be very effective and bring real value. When done right, the growing statement that “offline is the new luxury” becomes true. 

This article features in the UK Wealth Technology Landscape Report. See that here.