How can data management, technology and innovation help wealth firms to employ Next Best Action to improve the experience of their wealth clients?
- In a recent Refinitiv webinar, industry experts unpack the concept of Next Best Action in the context of wealth management and what this means for advisors and their clients.
- Next Best Action can be described as a service that empowers advisors to engage with clients in a constructive and mutually rewarding manner by prioritising the actions advisors should be taking to optimise their client relationships.
- In order to take advantage of Next Best Action, wealth firms need to ensure a minimum level of data management, investment in technology and embrace innovation.
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The wealth management industry is continuously evolving with digitalisation, mass amounts data and increasing numbers of new tools and platforms available, all of which can complicate the role of an advisor more than simplify it.
With all of that said, an advisor’s role is first and foremost about serving their clients and delivering the best possible experience.
In a recent Refinitiv webinar, industry experts unpacked the concept of Next Best Action (NBA) in the context of the wealth management arena and what this means for advisors and the client experience.
Listen to the full webinar: Reimagining the Next Best Action in Wealth Management
What do we mean by ‘Next Best Action’?
The concept of NBA can best be described as a service that empowers advisors to engage with clients in a constructive and mutually rewarding manner. NBA achieves this by prioritising the actions that advisors should be taking to optimise their client relationships.
Advisors today are typically serving large numbers of clients and, over time, the fundamental complexity of serving extensive client bases becomes ever more challenging. This can quickly lead to client dissatisfaction.
Although many advisors manage to develop a thorough understanding of each client’s individual goals and needs, keeping every client’s individual wealth agenda top of mind almost always translates into an impossible task.
NBA aims to overcome this challenge by leveraging leading-edge technology to help advisors cut through the noise and select the best possible actions to improve portfolios, propose new offerings or products, meet client expectations, and more.
By reducing the dilemma of information overload and accentuating high value-add insights and suggestions, NBA has the potential to offer immediate and substantial help to advisors, particularly in the post-COVID 19 era, where many firms are moving to hybrid models that incorporate more online engagement.
Given these benefits, it may be tempting to view NBA as a silver bullet, but the concept nonetheless presents multiple challenges for firms, including key issues surrounding data hygiene.
Refinitiv Wealth Practice 360 delivers a single view of an advisors book of business, providing an efficient workflow and better insights on demand
Challenges in delivering Next Best Action
In order to take advantage of the many benefits offered by NBA, firms need to ensure a minimum level of data management. Data is the key to improving each client’s wealth journey, and therefore lies at the core of success in NBA.
The data challenge is not insurmountable, but equally is often not straightforward. because it presents many firms with a technology challenge. Any investment in technology – which remains a pivotal part of NBA strategy – must meet the business’s overarching goals.
The good news is that the right solution does not need to be expensive, given that barriers to entry in the tech space are continually being lowered.
Beyond the data challenge, there is also a cultural challenge that should not be overlooked. While many firms want to embrace NBA technology, each firm’s culture will dictate the pace at which and manner in which they adopt the necessary technology.
Essentially, much of the success of NBA revolves around relationships and sentiment, and measuring this success can be achieved in a range of ways.
The first port of call may well to be simply ask clients for their honest opinions on the connectivity they experience between their goals and the service they receive. Moreover, levels of success can be judged by working directly with advisors to understand how NBA has improved their experiences.
From a company-wide point of view, firms can fairly easily measure whether the introduction of an NBA service has resulted in increases in efficiency and effectiveness, for example relating to proposal generation.
Finally, from a long-term perspective, the success of NBA should be apparent when assessing the stickiness of client relationships across generations.
Paving the way for future success
NBA presents a significant opportunity for firms of all sizes to leverage technology and substantially enhance productivity and the client experience.
Nonetheless, experts say that trying to solve the many challenges of NBA all at once is likely to be counter-productive. Rather, they suggest breaking concerns into manageable chunks and maximising existing competitive strengths.
Refinitiv offers wealth firms the content and analytics to better empower advisors to focus on the most relevant actions and, in so doing, to enhance their client relationships.
We understand that ultimately, the success of any programme depends on collaboration, and the successful combination of innovation, insights and addressing client needs.
Refinitiv Wealth Practice 360 delivers a single view of an advisors book of business, providing an efficient workflow and better insights on demand.