Reinventing the client advisor interaction model is the future of wealth management

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As the rise of digitalization continues to transform wealth management, and firms attempt to keep pace, the ways in which financial advisors and clients interact are evolving as well. We expect that future interactions will be powered by smart platforms that connect data from internal and external sources to create a seamless, omni-channel experience.

In our conversations with clients and industry experts, we have found that enabling client and advisor engagement is a top priority for wealth management firms as they seek to respond to evolving client expectations and behaviors, specifically across these three areas:

  • Expanding the breadth of involved participants
  • Tailoring specialized content through the use of analytics and AI
  • Reimagining the channels in which clients and advisors interact

Expanding breadth of participants

The industry is shifting to a digitally-enabled, holistic advice model, where clients are seeking advice on a variety of topics. In this new model, there is a link between the size and complexity of clients’ financial needs and the number of specialists required to support those needs, such as tax advisors, wellness experts, lawyers and accountants. Advisors will be the quarterbacks that direct experts to help clients deal with the impact of major life events (e.g., marriage, divorce, sudden job loss, new home buying, unexpected inheritance, etc.) within the context of their financial goals and objectives.

In the past, clients managed their finances in silos. Now, we have observed that many wealth clients are enabling their advisors to be the central coordinators of the multiple parties that manage their financial well-being, essentially to serve as life coaches. And, clients are demanding that these interactions happen digitally.

As advisors transition into greater facets of their clients’ lives, or expand to support traditionally underserved populations such as women and minorities, so should the firms that support them. We’re beginning to see investment advisory firms expand their brands into non-financial areas such as nutrition, health, wellness and exercise, forming complete centers of influence for their clients. Thus, transforming financial institutions and their advisors into complete centers of influence for their clients.

Transforming data into specialized content

No surprise, data plays a huge part serving up personalized, tailored advice. The ability to form a complete picture of clients using internal and external data, combined with AI, yields powerful insights that enables personalized content to deliver a differentiated experience for clients.

As firms expand their brands and advisors broaden their reach deeper into their clients’ lives, new opportunities to gain access to non-traditional data sources are created. As this expansion occurs, new methods of collecting that non-traditional data will be required to create actionable insights for both client and advisor.

For example, digital dictation tools can help advisors quickly debrief a client meeting, highlight insights and takeaways from that meeting, and generate voice or text notes that can be integrated into clients’ CRM records. Or, being granted access to clients’ wellness data can predict the need to save more for medical treatments or even a gym membership.

Clients or prospects interacting with a firm’s online content and thought-leadership can be converted into push notifications for their advisors. More importantly, this non-traditional data can be aggregated with more traditional data, analyzed, and used to predict and produce the specialized content and services needed to meet clients’ future financial needs.

Providing personalized and specialized content is key in creating more collaborative, sticky relationships. In fact, according to research from BCG, brands that create personalized experiences by integrating advanced digital technologies and proprietary data are seeing revenues increase by 6-10% — 2-3 times faster than those who don’t. BCG claims that over the next five years, personalization will push a revenue shift of some $800 billion to the 15% of companies that get it right across retail, health care and financial services alone.

Moving beyond traditional channels

The client-advisor journey from prospecting to onboarding to relationship management and client servicing has different requirements to support the increasingly remote and complex collaborative needs of each interaction. As clients demand greater transparency into their finances, new modes of interaction will push digital boundaries to support complex many-to-many interactions with real-time feedback capabilities beyond current video conferencing tools.

For example, augmented reality (“AR”) and virtual reality (“VR”) use cases are popping up in wealth management, including Fidelity Investments’ and Amazon’s next gen financial agent Cora. Cora helps clients visualize data via voice command. Additionally, the usage of AR has tremendous potential to provide clients with greater transparency and education into traditionally opaque products, such as structured investments.

Wealth management firms have an opportunity to expand their collaborative coverage of the client journey through new and existing channels, and to integrate them to create an “indirect network effect” between complementary products. In other words, an increase in usage of one product (Product A), leads to an increase in the value of a complementary product (Product B), which can in turn increase the value of Product A.

We recommend addressing gaps in the client-advisor collaboration journey through new or existing channels, and identifying linkages across channels that can be improved with automation.

As we look across the client lifecycle — from re-imagining ways of interacting with and attracting younger clients, making the onboarding process seamless, delivering the advisor-client relationship as a firm’s competitive advantage, and facilitating the ability to service your clients anywhere – the expanded breadth of participants, relevant curated content, and the clients’ channel of choice will define the client-advisor experience of the future.

Learn more about IBM’s digital strategy and transformation consulting practice

Phillip Sink, Partner, Wealth Management and Financial Markets, IBM Global Business Services, contributed to the article.

Senior Managing Consultant, Digital Strategy & Interactive

Jason Pereira

Senior Managing Consultant, Digital Strategy & Interactive

Mike Viola

Senior Managing Consultant, Cognitive Process Transformation - Wealth Management

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