HUMAN AND DIGITAL – THE HYBRID MODEL. A SOLUTION FOR THOSE WHO CANNOT YET AFFORD FACE TO FACE INVESTMENT ADVICE?

Wealth Management & Private Banking

15 July 2018James Goad

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EY’s research leads them to believe that the hybrid model is the way forward when it comes to customer service and financial advice within the wealth management industry. The topic of discussion centred on whether the hybrid model is the future for wealth management.

Headlines:

  • The driver behind the hybrid model is the clients’ demand for a higher degree of digitalisation.
  • Although the general opinion within the media centres on the robo advice model, there is no “one size fits all” model.
  • Wealth managers need an approach to accommodate their diverse customer segments.
  • There is more investment in the client centric design e.g. “what is the client journey, how can cross-channel customer experience be delivered, and customer engagement facilitated?”
  • There is a higher degree of automation within the back office that aims to decrease the delivery costs and better engagement.

Key issues and challenges:

  • The discussion started around the need for more investment in a client centric design:“What is the client journey, how can cross-channel customer experience be delivered, and customer engagement facilitated?”
  • There is a higher degree of automation within the back office that aims to decrease the delivery costs and better engagement, rather than in the front office at present. An example was given where Morgan Stanley has implemented the hybrid model successfully in the US. Their solution involves multiple front end entry points with a single automated back-end process. They provide fully automated services in combination with face-to-face human advice. The idea behind this approach is to enable their advisors to deliver a better service.
  • A participant of a large wealth manager raised the issue of how regulation like MiFID II applies to this model of new technology. Another issue raised is that of implementing technology, which complies with the regulation of the different markets large organisations typically operate in.
  • Another participant argued that there are a plethora of solutions regarding investment advice, but that the real value-add for firms in the UK would be technology solutions for financial planning and relationship management.
  • This led to the agreement that technology can be an enabler for deeper client relations for the individual wealth manager. The understanding was that the hybrid model would be very useful if it could deliver on key points like more efficient on-boarding as well as administrative aspects in the back-end processes and more insightful information generation on the front-end.
  • It was also highlighted that people want to be informed and that the ability to have quick access to information should be a key driver in the development and enhancement of technology.

Conclusions and solutions:

  • There is recognition within the industry that technology is the future but there is scepticism regarding how it will comply with the new regulatory environment, as well as how cost-effective these technologies can be.
  • While delegates recognise that technology is still in its early stages, it will take time and further technological advancements before it is implemented and integrated widely across the industry.  

Expert: Roopalee Dave, Director, Wealth and Asset Management, EY and
Bradley Northrop, EY

 


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