As digital technologies continue to radically shift client and advisor expectations, firms that are able to offer a compelling hybrid advice experience are best positioned to pull ahead of the competition.

According to The New Face of Wealth Management—our recent research of more than 1,300 investors—the future of advice will likely be a fluid spectrum of client engagement, spanning human, digital and robo capabilities. Our study found that 68 percent of ‘Emerging Wealthy’ and ‘High-Net-Worth’ investors already prefer hybrid models to a traditional advice model.

Hybrid model clients are significantly more likely (64 percent) to have sought and received firm assistance in financial planning than investors in any other model (44 percent), our research shows. What’s more, hybrid firms ranked higher than all others in several dimensions critical to customer loyalty and satisfaction, from ‘customized service’ to ‘low-cost products’.

As firms shift towards an integrated multi-channel digital and human advice experience, this is putting great strain on legacy operating models and architectures. Siloed lines of businesses, products and core platforms constrain execution and speed to market for hybrid models. While many of my clients have a well thought out digital strategy in progress, the challenge becomes how to progress through this journey and enhance the advice experience throughout.

Fundamentally, firms should be focused on Owning the Customer Experience while Isolating the Core commoditized processing. This means shifting to a modular architecture that buffers the clearing platform and focusing investment in platforms that help enable the digital experience and other differentiated capabilities. Getting this right means aligning your architecture in support of your vision and effectively using the vendor and fintech ecosystem that could drive innovation, speed and scale.

We believe the fundamental goal for a firm should be to own its customer experience while streamlining and outsourcing the commoditized clearing and other back-office processing.

The time to drive digital and technology transformation is now. I have never seen more engagement from both the client and fintech community around topics like collaboration across channels or a single approach to clients. As non-traditional competitors enter the ring, it continues to be an exciting time to work in wealth management.

If you are considering making a change in your organization, please email me, Scott Reddel. I would be happy to help you think through your challenges, navigate the solution landscape, and share my thoughts on where the industry is going.

In the meanwhile, take a look at my colleague Kendra Thompson’s recent blog on the subject, which I think you will find useful: The future of wealth advisory is an ampersand. Or read our report: The New Face of Wealth Management.

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