The Future Wealth Adviser

Expert: Ian Woodhouse, Head of Strategy and Change, Orbium  

Key takeaways:

• Client segmentation will result in tailored solutions in which resources are allocated more appropriately, e.g. more time spent onboarding UHNW clients vs mass affluent.
• Technology solutions and communication channels apply more easily to existing clients than new business prospects, which warrant more face-to-face contact.
• Covid has forced and encouraged more digital processes to be adopted – from Zoom or Teams calls through to e-signatures and digital document management systems – but more traditional providers are still set in manual ways.
• Efficiencies are clear and the direction of travel is right, if slow, but often cultural shift is needed as much as the uptake of the systems.

Main challenges being faced:

• Since remote working began, the biggest challenge facing advisers has been a lack of time.
• Secondary concerns over hitting revenue targets were pointed specifically at new business development rather than servicing existing clients. Those gaining referrals seemed less concerned.
• Compliance worries were easing as even government bodies are embracing digital processes, e.g. Land Registry filings, physical photocopies of passports etc for anti-money laundering (AML) purposes, various counterparties are moving in that direction.
• While certain pressure can be applied to encourage business towards those with digital processes, in some cases (e.g. Swiss private banks) manual systems are still in place. Wealth advisers remain at the mercy of particular organisations.
• One delegate suggested a cohort, where collective pressure over shared counterparties sitting behind the digital curve, could have greater influence.
• There has been an immediate shift to online customer services, portals if no choice, but people are still demanding F2F contact when it counts, e.g. during the March sell-off, for initial sign-up etc.
• If lockdown becomes stricter that could be a problem down the line (one mentioned socially distant meetings on golf courses, but if multiple households cannot meet, how will F2F meetings be possible?)
• Mainstream adoption will be hindered if cultural shift does not occur within the firm. Much of the technology already existed but how comfortable are we – as a nation – with actually using it (although becoming more open to virtual settings).
• It is likely we won’t see any measurable results for another 12 months.

Main opportunity/benefits of technology:

• Meeting efficiency was a major benefit of using remote working practices, as a three-hour round trip for a F2F meeting can be reduced to a Zoom call.
• Similarly getting multiple third parties involved (eg tax advisers, accountants, solicitors) means scheduling is easier and progress is quicker.
• Lockdown freed up administrative resources to enhance client reporting, e.g. digitising physical files, better linking to third party systems such as behavioural finance platforms, portfolio management tools, financial planning software.
• More people moving to paperless ways of working as sheer practicalities of working from home mean less space and reduced storage facilities.
• It is not necessarily a technological benefit but while asset inflows through bonuses etc have been limited, consolidation of external assets, especially from the XO space (e.g. self-service venture capital, private equity investment), has been exposed. There is a better performance available through a wealth manager – i.e. Covid has forced a reality check as hobbyist investing becomes harder work in difficult times.
• While robo-advice might have been expected to be tipped as the big trend as a result of the pandemic, there has been little talk of it. Delegates claimed to see more evidence of existing business models digitising their existing processes.
• Greater personalisation through data-driven insights will lead to more value-added services for higher net worth clients, while digital solutions from larger retail organisations will be more readily available for the mass affluent.
  • Both get a better level of service, just resourced and priced accordingly. 
  • This should fill the advice gap across certain demographics.

• We are already seeing wider adoption of digitalisation of client portals and platforms but these will start to be rolled out across the middle to the back office. We will see greater use of automation, robotics etc. driving efficiencies through all points in the chain.
• This is also not just about the Millennial/Gen Z generations. The over 50s are also using technology increasingly. Equally, it is not just the older client base that insist on F2F for critical meetings.