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Three factors driving digital advisory

Posted by on 13 March 2017
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Until recently, the tendency of the wealth management industry to lean more on technology, or FinTech, has always been the result of gradual changes in the interaction among three factors: consumers; regulations; and advisors. Now, with the impending perfect storm of these three factors on the horizon, the pace of dependence has quickened drastically through the digitization of client advisory, or bionic advisory, and proliferation of robo-advisory.

With the advent of the internet, mobile devices and smart phones, customer expectations are changing. According to a recent study performed by a global consulting company, more than two-thirds of customers around the world would welcome robo-advisory services or some form of digitized service (or bionic advisory) for their banking, insurance and retirement planning needs.

FundForum Asia 2016

Concurrently with changing  customer expectations, regulations have shifted to increase the responsibility for, and costs associated with, wealth management by advisors and financial institutions. One of the most significant signals has been in the United States, with the attempted amendment of regulations that would increase an advisor’s responsibility with respect to retirement related assets (which forms a large part of wealth management).

As customer expectations change and regulations shift, advisors will need to continue to differentiate themselves and show their value by providing holistic assessments of their clients’ financial future using a variety of channels so they can meet the growing needs of investors in an increasingly competitive market. The natural space for digitization or technology to make a difference would be one where it enables advisors to better communicate with investors.

In sum, the three factors of wealth management are all expected to converge to take adoption of a digitized wealth management platform to the next level and a new age where the expectation, delivery and results of wealth management will be through the increased use of digital channels, solutions and platforms.

Julian Schilinger is founder and CTO of Prive Managers, and will taking part in the panel discussion, the shifting nature of advisory, at the upcoming FundForum Asia 2017, taking place in Hong Kong 24-26 April.

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