Technology has been conspiring to lower price points of services for some time now, and I've been left with no doubt recently about Silicon Valley's desire to make financial advice affordable for the masses.
What about for businesses whose goal isn't to do it cheap? What about for those whose job is to do complex, comprehensive and top quality for clients who are willing to pay for the best?
Stewart Bell is Founder & Business Coach at Audere Coaching & Consulting. The opinions and statements are deemed to be those of the author, and do not represent the view of Robeco.
There have been a stream of research papers that emerged over the past few years, each loaded with conclusions about HNW and mass affluent clients' willingness to engage with digital advice.
There are too many to list in total, but a few of the more interesting include:
There's a lot of emotion flying around, as you'd expect with a shift of this nature. Uber is almost a modern day parable for a failure to change the offer to suit the changing demand, and the example is never far from the argument of why change is needed.
However rather than it being a 'have to' question, I would ask why premium advice firms wouldn't want to explore the addition of a so-called robo-capability.
Clients are less and less swayed by expertise alone, seeking to deal with advisers who have demonstrable system at the heart of their business. A strong and polished digital presence has become more of a hygiene factor than a selling point. Expectations are shifting fast.
You have the rise of the HENRYs (High Income Not Yet Rich). Gen X, affluent and happy to engage with solutions where step one isn't a face-to-face (perceived) sales appointment.
Though we can argue about the scale of the demand, it is there.
Both in the US and in Australia, the blended model of human and robo-advisers working together seems to be emerging as a winner. Stockspot have pivoted, as have Betterment. An open-source alternative to Acorns is surely not far away.
When I talk to firms about the challenges they face - getting engagement, generating more quality leads, reducing admin burden, increase client literacy and reducing dependence on staff - these are all things that this type of automation can offer.
To share a quote from my recent trip; technological innovation's aim isn't to create jobs, it's to create code. Those who own the code, define the future of the industry it touches.
Silicon Valley is building software to eat our world, but the evidence is suggesting the human touch is still needed.
The solution for advice firms, including those with premium leanings, is to embrace and get involved in the creation. Build and own the system, instead of just seeing clients.
However, all things start with small steps. So, rather than seek to build a robo advice platform as a first step, here are five ways you start to explore the opportunity.
http://www.forbes.com/sites/johnrampton/2014/04/29/connecting-with-high-net-worth-individuals-through-social-media/#62590d4eefe7
https://www.cbinsights.com/blog/jon-stein-betterment-robo-advisors-industry-challenges/
http://www.businessinsider.com/robo-advisors-are-gaining-popularity-with-high-net-worth-investors-2016-8/?r=AU&IR=T
https://www.betterment.com/resources/personal-finance/goals-and-advice/how-to-invest-10-million-with-a-robo-advisor/
https://www.accenture.com/t20150703T033306__w__/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Dualpub_17/Accenture-High-Net-Worth-Investors-Gen-D-Europe.pdf
Stewart Bell is Founder & Business Coach at Audere Coaching & Consulting. The opinions and statements are deemed to be those of the author, and do not represent the view of Robeco.
BY CLICKING ON “I AGREE”, I DECLARE I AM A WHOLESALE CLIENT AS DEFINED IN THE CORPORATIONS ACT 2001.
What is a Wholesale Client?
A person or entity is a “wholesale client” if they satisfy the requirements of section 761G of the Corporations Act.
This commonly includes a person or entity: