Expert: Paul Speight, Business Development Director, Ingenious Facilitator: Mark Elliot, Solve
Headlines:
- Wealth level remains the primary indicator for segmentation, but there is a pressing need for more comprehensive data collection, including client age and health information.
- Consumer duty regulations emphasise the need for tailored segmentation strategies that align with client needs while avoiding conflicts of interest.
- Recent budget changes, particularly related to pensions, require firms to revisit their advice strategies, including pension drawdown and inheritance tax planning.
- Digital adoption presents opportunities and challenges for engaging younger clients with modest assets.
- AI offers significant potential for real-time feedback and personalised recommendations, though concerns about data security and privacy persist.
Discussion points:
Client Segmentation and Consumer Duty:
Effective segmentation is vital for aligning financial advice with client needs, particularly under consumer duty regulations. While wealth level remains the primary indicator, firms need to adopt more nuanced approaches to avoid conflicts of interest and ensure fairness.
Gaps in Data Collection:
A significant proportion of firms lack comprehensive data, including client age, health, and lifestyle information. This limits the ability to segment effectively and deliver personalised advice. Improved tools and processes for data collection are crucial for addressing these gaps.
Digital Engagement with Younger Clients:
Digital platforms offer opportunities to engage younger clients with modest assets, but their scalability and effectiveness in fostering meaningful relationships remain areas for improvement.
Impact of Budget Changes:
Recent budget changes, particularly those affecting pensions, require firms to revisit advice strategies, including pension drawdown and inheritance tax planning.
AI as a Transformative Tool:
AI presents significant potential for improving segmentation, providing real-time feedback, and offering personalised recommendations. However, concerns about data security and privacy must be addressed to build trust in these technologies.
Key takeaways:
- Expand Data Collection Efforts: Firms should prioritise collecting comprehensive client data, including health, lifestyle, and other demographic information, to enhance segmentation and personalisation
- Invest in Data Management Tools: Effective data management systems are essential for ensuring data integrity and supporting more accurate segmentation strategies
- Leverage AI for Personalisation: AI technologies can enable real-time analysis and tailored recommendations during client meetings, enhancing the quality of advice and engagement
- Adapt Pension Strategies: Firms must revisit their pension advice approaches to account for recent budget changes, focusing on areas such as drawdown strategies and inheritance tax planning
- Enhance Digital Platforms: Developing scalable and accessible digital advice solutions is critical for engaging younger clients and addressing their financial needs
- Refine Segmentation Strategies: Segmentation models should evolve to align with consumer duty requirements, ensuring they accurately reflect diverse client needs and priorities
