While robo-advice may account for only a fraction of the total assets under management today, it is a technology that is here to stay—but not in the way that has dominated news stories. Rather than supplanting the financial advisor with technology, firms need to leverage new multi-channel automation to empower their advisors to focus on value-added, relationship-building activities. In this paper, we look at how wealth management players can focus on getting to the right combination of human advisors and automated investment advisory solutions in a hybrid model that seamlessly integrates the two.These hybrid models must allow a flexible mix of personal advisors and digital touchpoints that can be customized to the preferences of individual clients.
Rather than supplanting the financial advisor with technology, firms need to leverage new multi-channel automation to empower their advisors to focus on value-added, relationship-building activities. Ideally, commoditized functions can be delivered using digital tools enhanced with machine learning, and clients can be given the option to use online intelligence technologies to solicit advice on-demand via their preferred access points.
Entrusting one’s entire financial well-being to an algorithm alone is a risk that many investors are not ready to take. The real power of automated robo-technologies lies in their ability to enhance the services of human advisors. These technologies offer the potential to help advisors with a number of longstanding challenges, including the following:
- Ensuring the entire financial picture of an investor and his or her household are addressed— delivering retirement savings, risk protection, and beyond
- Cost-effectively providing meaningful advice to lower-income demographics— as a whole, the mass affluent have substantial buying power
- Providing personalized service in the client’s preferred format— from very hands-on, personal interaction to online self-service
Most advisors and firms are still drafting their hybrid advisor-robo experiences. Once successfully executed, these experiences will fundamentally evolve the relationship between advisors and their clients.