The industry is presently driven by several factors: regulation, accountability, next-generation clients, lower returns, higher operational costs, cyber security and pension freedoms, to name but a few. In an age of change, whether it is keeping pace with technological innovation, the value chain becoming more digitalised, or multi-channel methods of communication, many, if not all potential problems have an answer being addressed by modern technology and a maturing selection of outsourcing service providers.
The rate and pace of this change puts increasing pressure on the ability of firms to adapt. Being flexible with the way everything is constructed and structured allows you to do so, and also take advantage of opportunities to develop business models that meet new standards and expectations, including GenX and GenY.
How business systems are architected is important, as is the ability to adapt to unexpected changes that arise, including clients’ expectations. This could include the emergence of a new model of competitor, broadening demographics and channels of engagement, regulatory pressure, plus demands for new products or services.
With clients’ needs changing, these empowered investors have higher expectations. Therefore, it is more important than ever that firms are adaptable, with efficient applications and front-end tools that maintain productivity and connect in the ways that clients want.
A ‘hybrid model’ adviser is emerging, with the ability to use robo-adviser technology capabilities where it makes sense to do so and, at the same time, maintain the human touch that is still valued by many clients. Getting a machine to do the things that humans can reliably leave to this type of technology, such as applying formula to get the depth of data that supports calculations and regulatory reporting requirements, opens up opportunities for the firm to excel.
Looking at all the things that the adviser is trying to provide, achieving an edible blend between what you do in a machine-automated way and what you do as an individual, seems a wise strategy to follow. After all, ‘robo’ and its equivalent is likely to get smarter, quicker, and more efficient, so more can be done than is being done today.
Realistically, whether it is termed ‘machine learning’ or other techniques, software and technology will continue to evolve and become increasingly capable over time. Therefore, if ‘human’ advisers can respond to the challenges with easy, responsive and adaptable solutions, why not use these and free up time to concentrate on things that add value to the business because of their (end clients’) personal complexity.
An analogy of this could be the medical world and healthcare. Here, specialists are increasingly applying enhanced digital machines that are driven by a ‘human’ operator for precision outcomes and, potentially, reducing human error. As with the ‘hybrid model’ adviser, this technology supports rather than excludes the human-focused specialist. Therefore, as technology advances, the ‘human’ input can be maintained, increased or reduced.
Dealing with tough, complex tasks that are increasingly multi-dimensional, restricted and defined, then advanced technology is an enabler for the adviser, to enhance theirs and their clients’ experiences. Providing the means to delve deep and extract comprehensive analytics allows clients’ needs/values/motivations to be determined in fine detail. This also helps to support business governance, risk control, adherence to regulation, brand management, and strategy development. Such insightful, in-depth data brings enhanced accuracy and access to the high-quality breadth and depth of information needed to analyse, report and justify decisions. There are many benefits to acquiring this level of business insight, including improved client engagement, reduced operational costs, easily identifiable risks and business decisions justified.
The ‘new breed’ of wealth manager is forming partnerships with nimble service and technology providers, which can help them provide turnkey solutions to the challenges faced by professionals whose core role is managing their client’s money.
Of course, survival is possible without fully embracing disruptive technologies and services, but doing so means a huge commitment of time and energy in order to understand and implement solutions to shield oneself against risk.
Chris Fisher is chief executive of Multrees Investor Services
