Audio Transcript

Last year has resulted in significant growth of wealth management. Talking to most firms they have increased their AUM and fees. IT spending globally is > $20b annually and increasing year on year by 4-5% and will continue through 2024.

The application of more digital services during the Covid pandemic has been a necessity to maintain connectivity between investment advisors and their clients. Simply, virtual meetings are an everyday occurance now and accepted by most. Sending documents electronically is another standard.
We are facing a period of economic recovery. If you combine that with last years, Covid driven prioritisation of digital services it makes for an exciting disruption in wealth management IT over the next few years.

What will firms put their investment or money into? Certainly, the client experience or journey demands focus. Because it is differentiator for the business. Take old, manual activities such as onboarding for example. It generally causes bottlenecks and delays leading to frustration among clients and advisors. The advisor complaining that their IT is not up to the job. So, we end up with both sides of the chain being dissatisfied.

Then there are leading edge firms who have invested in full automated self-onboarding that has reduced onboarding to 15 minutes or at least a few hours.
They have joined up the client journey in a seameless, system managed process combining prospecting, risk profiling, AML/KYC, Account opening, eSigning of documents, integrated biometric authentication, investment mgmt. and reporting without any perceived delays or gaps in service. And they have done this by making sure the advisor can always be called on for face-to-face interaction when needed without disrupting the client journey. It’s a true HYBRID client/Advisor experience.

In a recent survey Celent predicts 68% of clients expect 100% digital onboarding in a post covid environment
The next evolution in the client journey, to improve the advisor/client relationship is the introduction of Intelligent Advice using AI. If you can optimize the advisor workflow you can more efficiently and effectively manage more clients. The big mistake in the search to increase the client base was to think of robo advisory technology as the panacea. Clearly it didn’t work. The right move was to introduce the advisor into the robo automated processes when the client asks for it. This Hybrid approach is now generally accepted as the way to evolve the business.

Another evolution is t0 use data analytics to better assist the advisor in achieving investment return for their client. Freeing an advisor 2 or 3 hours per day from checking investments and strategy, can you imagine how much more business getting activities they can engage in?

At present there is a huge increase in implementing CRM systems in the wealth industry. This has been going on for years without much success but now there is recognition that data will be king in the new paradigm. To use new technology such as AI and Machine Learning, you need data and firms need to first have CRM at its core before they can start analysing data to deliver intelligent advice. By Intelligent Advice, I mean highly personalized investment advice based not only on the advisors’ ideas but incorporating client behavior and preferences together with automated sophisticated analysis of investment return.

This can deliver robust assistance to the advisor and to larger number of clients. Not just to the traditional HNW client but also the Mass Affluent base where previously it proved too costly to secure those clients.
Robo platforms had their role in introducing new technology, we now see traditional firms starting to adopt some aspects of this new technology and with Covid being a further accelerator firms now are prioritizing data so they can deliver AI based Intelligent Advisor recommendations to their Hybrid Advisor client journeys.

Less than 30% of wealth firms have implemented fully a “data analytics” strategy. There is a tremendous opportunity still to be one of the first!