Fintech has the power to transform the wealth industry. In a world of robo-advisors and big data, our expert panel considers whether there will always be a place for wealth managers.
All financial services firms want to operate better, faster and cheaper. However, cultural differences give fintech firms the advantage in achieving these goals.
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It’s a different way of thinking — a mission-based philosophy — that differentiates the current wave of fintech firms.
Their mission is to train a laser sharp focus on solving a single pain point and ultimately to elevate the client experience.
Traditional financial services can leverage fintech by aggregating and incorporating these single pain point solutions into their holistic client experience and elevating the client experience across the entire value chain.
At the recent Insight Wealth Conference, we brought together three experts to discuss the new wave of fintech disruptions transforming the wealth industry. They were:
- Bill Robbins, CEO of WealthForge
- Michael Raneri, PwC Strategy & Global Fintech Innovation Lead
- Dr. Kelli Keough, Global Head of Digital Wealth Management at JP Morgan Chase
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Will robo-advisors replace wealth managers?
The core service that robo-advisors provide — portfolio allocation, based on a risk score, with systematic account rebalancing, using automated account opening and providing performance reports — is not new.
The robo-advisor value proposition — a better anytime, anywhere; scalable; lower cost fiduciary offering — has made an indelible mark on the industry.
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It has taught the industry to focus on the customer journey first, and then layer on technology to address the pain points, reduce the friction, create transparency and deliver better value to investors.
The demand for digital wealth solutions is not a millennial phenomenon. The digitally proficient segment cuts across all generations.
Regardless, customers will always need human advice as their financial planning and investing needs become more complex.
Improved efficiency will free advisors to focus on building customer relationships and providing optichannel advice (when, where and how customers want it).
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Where are the opportunities for fintech firms?
First, security.
There is a strike zone involving secure collaboration, identify verification, login, secure communications and document management which needs to be addressed in order to improve the client experience.
Touch ID has shown that technology can help remove barriers, but greater innovation is needed to remove the walls between a customer and their data in a highly secure, but low friction manner.
Second, big data.
Again, another concept that is not new, but one that can be used to create better, more personal services for a customer that reduces risk for the financial institution.
With big data, wealth managers can anticipate what is happening in a client’s life — the moments that matter — and also use scenario planning to model the potential consequences.
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Connect the dots to create personalized experiences
- Identify personas using demographics (who is the customer?) and psychographics (how do they behave, what do they want?)
- Design the customer journey.
- Create personalized business models. How does a customer want to be served and pay for services? Does this change over time?
- Apply the technology that will deliver the best experience.
- Leverage big data to identify the moments that matter.
- Deliver the personalized solution when, where and how the customer wants it.
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Innovation is important, as it smoothens and speeds up processes, but there will always be a place for the wealth manager because the all-important client relationship and the delivery of a personalized solution simply cannot be replaced.
