Financial firms are increasingly leveraging digital technologies such as artificial intelligence, cloud and intelligent automation to hyper-personalize wealth management offerings. Our numerous interactions with global wealth firms indicate the move is driven by the need to achieve higher customer profitability, reduce customer churn and increase the overall value of customer transactions. These firms are primarily focused on strengthening the client-advisor relationship and providing best-in-class user experience.

However, the existing advisory platforms are at a different level of maturity in their transformation journey and pose a hurdle to the movement. Typically, wealth management firms have multiple legacy platforms, vendor products and bespoke solutions, resulting in a complex architectural landscape. Going ahead, the firms will have to build a multi-year roadmap to modernize the existing systems and transform into a next-gen digital advisory platform.

Evolving business landscape

In the backdrop of constant technological innovation, wealth management firms are looking to speed up the transformation of their advisory platforms as well as enrich products and service offerings across client-advisor touchpoints. The focus is on offering a suite of responsive, personalized and contextualized services designed using the insights into the financial needs of the customers.

A Morgan Stanley report indicates clients are seeing the benefits of digital technology in wealth management. The latest trend suggests a surge in the hybrid advisory model and highlights the need for the right set of digital tools to strengthen the client-advisor relationship. The firms are not only exploring multiple digital themes but also building new capabilities to enrich and foster the client and advisor relationship. This includes developing new tools and features that allow the clients and the advisors to engage intelligently round the clock.

Envisioning the next-gen wealth advisory platform

Wealth firms are focused on building best in class technology solutions and creating differentiated client experiences. Some of the core solution components include new digital capabilities to enhance client and advisor engagement, deepening the existing client relationships, increasing the penetration of digital tools, driving operational efficiency through process automation and delivering actionable insights derived from a wider financial ecosystem.

Here are some elements that will require consideration.

• Clients have multiple financial needs such as weddings, home-buying, vacation, education, philanthropy and so on. Additionally, they usually look for advice beyond conventional goals such as retirement planning. The mobile-based, interactive and intelligent platform such as a wealth advisory mobile app is a good example where an advisor and client collaborate to build financial plans to meet the latter’s investment objectives. Going forward, smart digital tools such as co-browsing applications, video conferencing, mobile messaging applications and document vaults will enable an immersive engagement between the client and advisor.

• To build a holistic financial plan, it is imperative for an advisor to have a comprehensive view of the customer, including their financial positions with external firms such as a credit card agency or insurance providers. Features such as account aggregation and held-away asset details play a critical role in building a consolidated customer view.

• Financial behavior of the client is an important dimension when monitoring their financial plan on an on-going basis. An AI-based solution to analyze patterns in client spending will help the advisor predict the probability of achieving a set goal within the desired timeframe. In case of a significant deviation, it will help the advisors recommend corrective measures or re-align the financial planning in accordance with the needs.

• A recommendation solution backed by AI will help the advisors provide very personalized advice. AI can help sift through large volumes of structured and unstructured data from multiple sources like social media, market news, data feeds etc. to generate actionable insights for the portfolio. Similarly, personalized client services can be offered in customer service, cross-sell, up-sell, investment reporting, learning, market news and so on.

• A suite of intelligent analysis tools for risk simulation and what-if analysis will help the advisors more accurately predict the impact on the client portfolio and in turn recommend corrective measures. These tools, when augmented with interactive data visualization, can help the advisors make prompt informed decisions.

The road to future

Going forward we see the new age client-advisor relationship to be empowered by digital platforms. The services are set to become hyper personalized going forward driven by digital technologies. To achieve this, the firms will need scalable advisor platforms that are also easy to integrate with multiple partners in the financial ecosystem, primarily enabled by digital technologies such as open architecture and cloud infrastructure. In addition, the firms will have to update their legacy systems and build a futuristic roadmap to deploy relevant digital capabilities based on their business priorities. Prioritizing and benchmarking the current capabilities and then integrating them with other systems will pose a challenge. However, the firms can maintain the pace of digital adoption and embrace the next-gen platform by partnering with the right technology solution providers.