Hybrid advice is the future, says Wealth Wizards

Hybrid advice is the future, says Wealth Wizards

Hybrid advice will fast become the main business model in the wealth management market, according to Wealth Wizards' business development director Simon Binney.

Speaking at the Global WealthTech Summit last week (November 3), Binney said hybrid advice will be the future, built on trust and incremental engagement, both for clients and businesses.

He said early robo-advice offerings had been touted as the evolution of financial advice and the potential solution for the advice gap but that never materialised. 

“Robo was promoted on the basis of ‘build it and they will come’ but it didn’t happen as expected because, in our experience, no-one wakes up in the morning and says, ‘I need financial advice’," he said.

“Usually that happens because of a life event or a change in circumstances and then people turn to trusted brands with which they are familiar to serve them. Typically that will be their bank or a financial adviser.”

He said hybrid advice provided that “easy next step” for the industry, with banks and financial advice firms offering different levels of service to different types of customers supported by technology.

“It will be built on trust as well as introducing clients to advice in the way that best meets their circumstances,” he said.

“This can take the form of guided advice where the client is walked through a digital process aligned with the advice firms' pensions or investment policies, using chat bots to ask questions at each stage to help the client progress; or it can be offered as the same digital process but with the option to speak to an adviser; as well as used to support the full advice service.”

He said intelligent automation could take out the heavy lifting of the advice process, such as fact find and suitability report creation, freeing up advisers’ time to see more clients.

This in turn allows advisers to focus on the advice elements where they deliver most value and are most valued by the client – talking about the client’s goals and aspirations and the advice recommendations..

“Hybrid advice also allows clients to interact with the advice firm in the way that best suits their needs at the different stages of their wealth accumulation journey, allowing them to engage in the way that they want and build on their use of the services as their needs increase,” he said.

“Similarly, using a modular hybrid advice system, advice firms can add technology into their business incrementally. This may start by automating elements of the traditional advice model, and move on to offering a low touch digital advice/guidance service further down the line.”

Binney added: “Using hybrid advice we have the opportunity to serve more people in the way that suits them and so get many more people used to financial advice and see it as a benefit rather than an out of reach service.”