Wealth Advisor

Man & machine: what does the future wealth advisor look like?

Business woman having an online meeting with her clients during lockdown

Kiwis are living longer than ever before, with the average life expectancy increasing from 69 years in 1950, to just over 82 years in 2020. Medical advances, lifestyle changes and technological innovations have not only resulted in people living longer, but has also caused the global population to rise significantly.

Because of this shift in population demographics, the financial advice model is more necessary than ever before. As the population continues to grow and subsequently age, investors will turn to advice to become more comfortable with their financial situations and to help support their unique investment and retirement goals. So how can advisors meet the needs of modern investors at scale, while ensuring that their advice fees are accessible for a mass market audience? It’s simple – start embracing emerging technology to future-proof the advice model.

Improved access to clients across the wealth spectrum

The emerging mass market investor group presents a huge opportunity for advisors to increase their customer base and improve their market share. To be successful, advisors need to embrace the idea of digitising their knowledge, and making it easily accessible to a wider audience. Artificial intelligence (AI) and intelligent workflows will help power automation and client self-service technology, which is essential for advisors to service this segment in a cost-effective and scaled approach.

On the other end of the scale, emerging HNWIs are more diverse and demanding than previous generations, with a significant rise in women billionaires. By the end of 2020, it is estimated that women will control approximately $72trillion, which equates to 32% of global wealth. Having grown up with technology, emerging HNWIs expect to have the same level of personalisation and unlimited access to information with their advisors that they experience with other online services. Technology that delivers speed and efficiency will play a key part in retaining these customers. As these elements become table stakes, enriching data analytics combined with AI powered tools, such as interactive client portals, will help advisors deliver the personalised communication, transparency and tailored product offerings this segment wants.

“Always on” omni-channel presence

Thanks to Covid-19, there’s been rapid digitalisation of traditional meet-and-greet advisor approaches. Companies can no longer afford to dictate how customers can access their information. Wealth advisors need to make themselves readily accessible across a number of platforms, both physical and digital, to service clients in a manner that suits them best. Complementary digital offerings with an option for human-access will help improve accessibility and transparency.

Automated workflows and intelligent AI powered tools, makes this 24/7 service model possible. Invsta’s latest report, “Is your business ready?”, indicates that robo-advice is fast becoming an essential tool to break into untapped markets. Robo-advice, or as we prefer to call it digital advice, allows you to provide customised advice to a mass audience across multiple platforms while reducing your resource overheads. As trust in AI grows and a more hybridised approach is adopted, we’ll start to see it playing a key role in supporting and enhancing the advice process. From intelligent customer prompts and chat bots, through to a complete digital advice process with an online output, AI is a key strategy for business growth.

Wealth advisors will morph into mentors

There’s no question that technology will do most of the administrative heavy-lifting in the future. As tasks and manual processes get replaced, advisors will take on a more educational role and coach their customers to achieve financial wellbeing. Advisors will help customers identify what matters most to them and use data analytics and behavioural information to keep them on track. Clients will start to play an active role in managing the administration side of their investments through self-service functionality, such as online investment. Because of this, advisors need to adapt their service offering to stay relevant for the next generation.

The explosion of technology presents a great opportunity for wealth advisors to adapt their service models to align to the shifting customer dynamics and market influences. The need for investment advice, and particularly coaching, is stronger than ever, as the next generation of investors look to navigate a post-pandemic world and seek out information to improve their financial wellbeing. Accessibility and transparency, both in information and fee structure, as well as client-centric support will become the new battlegrounds for success.

Take a look at our wealth advisor solution to help support and enhance your firm’s advice experience.

Sources:

https://www.macrotrends.net/countries/NZL/new-zealand/life-expectancy
Women’s wealth is rising (2018), The Economist, UK, viewed 12 June 2020,
https://www.economist.com/graphicdetail/2018/03/08/womens-wealth-isrising

Rachel Strevens

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