Firms Think Robo-advisory Is not a Threat? A Bit Short-sightedly Perhaps


The report Transforming Your Business Through Advisor Technologies from Celent Research draws some interesting conclusions about where companies will invest with regards to technology in the near future.

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Goal Based Investments and Hybrid Advisory

Goal-Based Hybrid and Robo Investment

This is a summary from the presentation about implementing goal based hybrid and robo-investment advisory, held by Michele Tanzi, Objectway Client Solution Director for Advisory and Digital Solutions, last December 2nd in London, during Objectway [IN], our first International Customer Conference. Continue reading “Goal Based Investments and Hybrid Advisory”

CRM: a Good Strategy Helps Wealth Managers

Get to every client

Today, a wealth manager who wants to thrive has to widen the choice of service options for its clients. That’s because the clients are demanding new and unprecedented levels of automation and self-managing tools and, at the same time, they still look for a truly personal relationship with the wealth manager, the same they could find at their traditional, brick-and-mortar, bank from the ’90s.

The Wealth Management Trends 2015 report from Celent Research explains how wealth manager can use CRM systems as an important tool to effectively manage these issues.

A CRM system has indeed two main roles: collecting either data and knowledge regarding clients, but today’s CRM expected role go far beyond . The information gathered through a CRM can ben used by the advisors to craft a really personalized experience for the client, that can benefit either from the most advanced digital tools and a close relationship with an advisor he or she trusts. It is a mutichannel collaboration platform to engage with your customers.

Implementing an effective CRM strategy is not an easy feat. Wealth Management Trends 2015 shows the main business functions in a well-executed CRM strategy.

A CRM Framework
A typical CRM framework. Source: Celent report “Wealth Management Trends 2015”.

The report also shows how CRM systems are growing in functionalities, compliance, analytics, artificial intelligence features, and access from mobile platforms, to answer the needs of advisors and those of the clients too; they can often take advantage of dedicated websites and repositories for learning, investing and talking to the wealth manager anytime, anywhere.

From CRM to Financial Planning

In the foreseeable future, financial planning will remain a chance of differentiation for advisors that seek differentiation and a way to stand out in the market. In fact, the complexities and the need for human touch associated to financial planning make competition in this area hard for fully-automated services.

A good CRM strategy allows the wealth manager to invest on the automatized part of their experience in order to enable real conversations between client and advisor through digital platforms: a better reach towards the client and resource optimization, both at the same time. The client, meanwhile, has the self-managing options he or she demands, without giving away the chance of receiving human and personalized advice.

Roboadvisory: change will happen!

Winona Savings Bank Vault

Here follows a bridged excerpt from my participation in a panel about roboadvisory, during the Ascosim Conference in Milan, on October 28th, 2015.

Roboadvisory Is Inevitable

Question: Which models are developing in the banking channels? Are banks considering this trend, or are they overlooking it?

My comment: I’ll try to consolidate what has been said until now, by saying that the main point is to combine a roboadvisory process with the more human and emotional part of the process.

It may seem trivial, but the truth is that technology is an enabler for getting there, not an answer. For instance, we realized that MoneyFarm is more used by Gen-Xers and baby boomers than millennials. But the point is, the customer are becoming digital faster then expected and banks have understood the existence of a range of customers feeling the need for a digital engagement.

In such a market like Italy, that is especially driven by human interaction, a technology-only answer is going to be a niche; the duty of technology is to enable the synergy between human and digital aspects the so called hybrid delivery.  I do believe that this approach will succeed world-wide.

This is why we call it digital wealth experience, the capability of creating digital experience for an investor, where the process can start digitally and develop on a human channel also, or, vice versa, can be a mainly human relationships that gains technological tools as it unravels. Time changes people, however; I wasn’t interested in a digital interaction twenty years ago. Today I switched my provider because I could no longer stand to have to place a call to ask for a report, or to write an email to get any kind of answer… time has changed and today I want a report to come when I want to, not when the provider does.

Big players are moving in this segment at the moment with big internal investments. Role of technology and software providers like us is to scale these novelties towards lower levels of investment. We have a platform, Conectus, that fundamentally is an enabler of this digital wealth experience. By the next weeks, for instance, CheBanca! will begin the ad campaign about its Yellow Advisors; the system is based on our platform, but the digital experience was designed by CheBanca!. The winners in this sector, as said before by another speakers, will be the ones that will be able to create an AirBnb like customer experience in the digital wealth advisory landscape.

As we said the human factor is still the core of the relationship in Italy, where a true hybrid advisory market doesn’t exist yet (how many banks actually allow you to choose a portfolio online and, by clicking a button, talk with a live advisor to develop a relationship?) and sometimes there is the fear of disintermediating the private banker, or the financial advisor. But the digital customers will become the majority soon, and not having an hybrid approach will limit your business.

Just let me remind you how Kodak got busted. They invented the digital camera but were afraid that creating a new digital division would have disrupted their core business and create conflict between the business division within the company. The digital camera disruption happened anyway and they disappeared from the market ! The same will happen for digital wealth,  the evolution of this model will simply happen no matter what you do. And you will have to cope with such a change.

Changing Buying Behaviors

Question: I can’t think of building a virtualized call center; I say hybrid and mean that the investment choice engine is robotized, while the human relationship goes by an advisor or promoter. It’ll be hard in Italy for a totally non-physical market to take off, because automating a process of definition of people’s needs is likely to create a simplified matrix of cells, and a a customer I won’t like to be simply put inside a cell in an automated way.

My comment: The point is, the digital buying behaviors for the new generations are already well developed and are completely different from the previous generations. New generations use for instance to book and holiday. Who would have said that 15 years go ? and when do millennials begin? It depends on what you read but, if you agree with 1982 as the starting point, there are millennials that are soon to inherit from a baby boomer and is going to be 40 in a relatively short time. It is said that millennials like cash more than other forms of money, but when they’ll inherit some hundreds of thousands euro, rest assured that they’ll like to invest too.

But they will not expect the same investment experience that their parents got, the engagement mode that will have to change. If there is a digital-only experience, I agree that we can loose the last mile, maybe the most profitable and rewarding for the investor; but, without a digital engagement, you risk not even getting there. Many financial networks are going very well because the collect a lot of money from legacy customers, but I’m not sure about how many new customers they are onboarding today. I guess prospects are more likely to go somewhere else to get advisory, if they will not perceive the investment experience they are looking for. Brands are not that much relevant in the digital world as they were 20 years ago.