concrete steps to adopt a hybrid human\u2013machine investment advisory model.<\/strong><\/p>\n\n\n\n
\u2022 Hands off to Hands On \u2013 The move from passive to active investing
\u2022 No Such Thing as a Typical Client Profile \u2013 Client needs are unique and diverse
\u2022 Regulation – Stumbling blocks or stepping stones<\/p>\n\n\n\n
Content is based on a survey with Financial Institutions headquartered in different regions, <\/p>\n\n\n\n MOVING TOWARDS A HYBRID HUMAN\u2013MACHINE INVESTMENT ADVISORY MODEL<\/strong><\/p>\n\n\n\n Prior to the COVID-19 pandemic, digital transformation in the wealth management industry was In a recent survey by Factset<\/a>, the top 3 factors that provide clients assurance of the credibility of their Wealth Manager are an excellent brand, competent employees, and quality information for investment ideas. With a focus on digitalization and technology, firms can consider the following actions when establishing an intelligent content management solution to ensure personalized content.<\/p>\n\n\n\n This does not mean abandoning the RMs that are crucial to the business model. Instead, a hybrid <\/p>\n\n\n\n MACRO TRENDS & THEIR CHALLENGES<\/strong><\/p>\n\n\n\n Hands Off to Hands On Investment options and demands are more varied than they have been in the past. Whether it is in Firms should reflect whether:<\/p>\n\n\n\n <\/p>\n\n\n\n MACRO TRENDS & THEIR CHALLENGES<\/strong><\/p>\n\n\n\n Regulation – Stumbling Blocks or Stepping Stones? It appears meeting these obligations necessitates higher expenditures or risks stiff penalties<\/a>. At present, accountability is pushed to the Front Office, who is expected to also be self-enforcing compliance requirements. The sheer difficulty of this deters firms from capitalizing on new business opportunities, whether in new spaces or geographical locations. <\/p>\n\n\n\n It is precisely because of the difficulties that firms who have a handle on this find themselves with a lasting competitive advantage. Many compliance officers see technology as part of the answer. By ensuring that operations adhere to a robust framework that includes checks on licensing regimes and client suitability, firms can efficiently offer client-compliant information and offerings. This contributes to better client engagement, and ultimately more business for the firm.<\/p>\n\n\n\n How does a global wealth management company sharpen its competitive edge? Amidst this challenging landscape lies opportunities to create a competitive advantage for firms <\/p>\n\n\n\n BANKS RECOGNIZE THE NEED FOR A HYBRID SERVICE MODEL, FEW HAVE TAKEN THE LEAP<\/strong><\/p>\n\n\n\n Firms that adopt a hybrid human\u2013machine investment advisory model will find themselves with a success differentiator. The APAC region sees more RM-client interaction as clients are often served on an advisory basis and tend to transact more frequently. Digital disruption is also happening apace in this region, clients tend to be more digitally savvy than in Europe, allowing digital service models to be more commonly adopted. This might be the reason for (1) a fully customizable, comprehensive, client-driven multi-channel interaction, and (2) advisor enablement being listed in Accenture-Orbium survey <\/a>as one of Wealth Management\u2019s (\u201cWM\u201d) top priorities for 2025.<\/p>\n\n\n\n
conducted in collaboration with Hubbis<\/a>.<\/p>\n\n\n\n
already a strategic imperative well underway. With increased vaccination rates globally, a new normal has emerged with digitalization at the forefront of adaptation strategies. At stake are customer loyalty, engagement, and experience. A winning hand for customers\u2019 hearts and mind have meaningful insights, hyper-personalization, and customer service. Not forgetting that customers themselves have raising expectations as they too enjoy the increased digital interactions in all aspects of their life<\/a>.
Underpinning this move towards digitalization is Technology. It has created the potential for wealth management firms to leverage their troves of client data to curate a unique customer service journey tailored to individual client needs. Historically, dedicated relationship managers (RM) curate investment information and delight their customers, creating long-lasting profitable relationships for firms. However, the pandemic challenged the sustainability of such a model. If firms want to provide personalized investment information at scale, they need to rely on smart content management solutions.<\/p>\n\n\n\n\n
model is suggested, in which RMs are enabled by technology in order to serve more clients more
meaningfully.<\/p>\n\n\n\n
<\/strong>High Net Worth Individuals (\u201cHNWI\u201d) are starting to move away from passive investment strategies to making self-directed investment decisions<\/a>. This leads to a demand for greater access to timely information on investment products or topics of interest relevant to their portfolio needs. In an environment where it remains common for RMs to manually customize reports provided to clients, these demands are oftentimes left unmet, resulting in unquantifiable lost opportunities and frustrated clients.<\/p>\n\n\n\n
Environmental, Social, and Governance (\u201cESG\u201d) related space or alternative investments like digital currencies or Non-Fungible Tokens (\u201cNFTs\u201d). It becomes more costly and effortful for firms and their RMs to provide adequate information and complete information to clients for their decision-making.<\/p>\n\n\n\n
No Such Thing as a Typical Client Profile
<\/strong>The profile of the client is becoming increasingly diverse. There are 114% more female-owned
businesses in the US than there were 20 years ago<\/a>. The wealth in emerging markets continues to rise<\/a>, triggering a class of \u201cnouveau riche\u201d. Technology and alternative financial products have
created new sources of income, many of whom are young and tech-savvy. The family nucleus is
also evolving. With more single-parent families, cohabitation, and same-sex marriages in recent
decades<\/a>. Against this backdrop, wealth management firms are pressured to keep up, empathize
and deliver accordingly.<\/p>\n\n\n\n\n
<\/strong>Some regulators, now conscious about not becoming obstacles to innovation, are working with financial institutions to better understand ways to shape the business landscape. Nonetheless, in a global market, keeping up with different regulations and their changes can be difficult. In Thomson Reuters\u2019 2018 Cost of Compliance report<\/a>, there were more than 56,000 regulatory changes in 2017 alone.<\/p>\n\n\n\n
<\/strong>A large Swiss Private Bank used to depend on their RMs having access to all sales-related materials, everywhere. From pitch books, presentations to fact sheets. Ensuring materials were up-to-date, compliant and timely distributed to clients was an onerous task. In 2018, the Bank adopted a technology-enhanced content management approach to automate this process, free up time of their RMs to be better spent engaging more clients on a meaningful level. Through an integrated content management solution, its content templates are automatically updated, translated, compliant with regulations and distributed. This improved efficiency and reduced the time spent by RMs on administrative tasks and automated regulatory requirement fulfillment that used to be a tedious process.<\/p>\n\n\n\n
that can adopt a hybrid model where RMs are enabled by technology-led content management
solutions.<\/p>\n\n\n\n
Despite this, only a handful of market leaders have taken the leap towards a technology-enabled solution. Why is that? Reasons are multiple and varied, but a simple element can explain this discrepancy: the fear of sailing in the unknown. <\/p>\n\n\n\n
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