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Hybrid wealth management offers the best of both worlds, with technology doing the heavy lifting so advisors can focus on building quality relationships

Hybrid wealth management offers the best of both worlds

Wealth management has traditionally been a highly personalized service, built on strong in-person relationships between advisors and customers. However, things are not as fixed as they used to be. Customers’ preferences have changed and hybrid advisory services are a key way to provide the experience they now expect.

So, with customer experience at the heart of wealth management, how can financial services firms work harder to connect their channels?

Today’s investors are no longer making crucial wealth management decisions at the milestone ages of 21, 30, 40 and 60. We are seeing much less rigid and linear progressions through life. In a single lifetime, for example, an investor may start, pause and restart a career; start or blend a family; and retire anywhere between the ages of 30 and 80.

Considerations around inter-generational wealth management are also evolving, as families seek ways to support one another through major life events.

Post-pandemic, people expect flexibility in most areas of their lives, including their wealth management services. John Porteous, managing director of CFS at Charles Stanley recently told International Advisor: “The pandemic has made people think about how they want to access advice, consume content and ultimately interact with their advisors. While many appreciate the convenience and connectivity of digital access, they ultimately still value the reassurance of speaking to qualified and professional advisors.”

Financial services firms need to catch up with other sectors by making greater strides into digital services. Only by adopting embedded digital services can they meet customer expectations, particularly when it comes to emerging high-net-worth individuals (HNWIs) within the millennial population.

However, it’s not simply about moving everything to a virtual investment platform – the solution is more complex and nuanced than that. Post-pandemic there is a focus on digital-first, but there are times when only a personalized approach will do. Many women, for example, prefer the reassurance of an advice-led approach, rather than just a flurry of information on products and performance.

According to Capgemini’s World Wealth Report 2020: “Hybrid advisory models will be a key opportunity for wealth management firms as high-net-worth individuals increasingly use a mix of digital and direct interaction.”

What do we mean by fluidity in wealth management?
New research shows customers prefer hybrid models that combine human and digital capabilities. Providing this fluidity for a customer means giving them a selection of routes such as:

- Self-serviced trading
- Robo-advice
- 1-2-1 advice via phone, email, video conferencing or in-person

Management consultancy Oliver Wyman predicts that by 2024, 20% of engagement will occur face-to-face, 25% via apps and 15% through video conferencing.

For the best customer experience, this should feel completely seamless with all options available within one app – the wealth management investment platform. Investors should not be aware of how or why they are interacting with a particular element of the app - it should happen intuitively.

When building a hybrid advisory proposition, the human touch is still an important element. The customer should always have the option to speak to an advisor either face-to-face or by phone or email. This fluidity between channels is crucial, as analytics show that customers are more likely to abandon a product than seek help from support when they hit a dead-end in a self-service proposition.

How to create a hybrid wealth management approach
Many key players in the financial services sector have invested in digital transformation, but are still a long way from being able to offer a fully fluid customer experience. Building a successful hybrid wealth management solution needs organizational change. Firms need to rethink their organizational structure if it silos different product offerings, and shift an internal focus to their customers.

Customers have little patience with legacy approaches and do not expect to encounter silo products and outdated propositions. For the best chance of success, this new approach needs to come from the top and be a core element of business strategy

Once a company has achieved this cultural shift, it can create an embedded customer experience where the new proposition sits naturally within existing channels.

The Nucoro Platform: hybrid wealth management solution
Digitizing processes while keeping customers firmly front of mind requires an advanced, flexible and scalable platform.

The Nucoro Platform can:

- Build user experiences based on existing blueprints and best practices
- Use algorithms to develop and rebalance customer portfolios
- Automate and streamline all workflows, onboarding and data-related tasks which reduces errors and improves efficiencies
- Seamlessly integrate through API endpoints
- Bolt-on native partners to cover any additional internal functions

It also creates digital updates on changing market factors. Customers can check their portfolio performance online at any time, which is a huge change from the traditional annual portfolio review.

The advantages of hybrid advisory platforms for private banks and wealth management firms
Using a hybrid investment platform like Nucoro provides access to a broader customer base, with broader propositions. Firms will be able to target younger generations who appreciate a more fluid, customizable approach. Accenture found that 68% of emerging wealthy and HNWIs already prefer hybrid models to a traditional advice model.

John Porteous from Charles Stanley highlights: “An advice gap where individuals, particularly from the younger generation, have too little wealth to access financial advice.” However, once onboard, wealth management firms can support these younger investors throughout their lifetime. They also avoid these customers being snapped up by a disrupter

Digital wealth management keeps the best of the traditional ways and makes wealth management more transparent and convenient. These hybrid methods can have a positive effect on customer-advisor relationships, with advisors having more time to focus on developing meaningful, lasting connections.

A hybrid advisory approach is also a more resilient business model, enabling wealth management firms to grow and thrive in the digital age and keep ahead of the competition.

Edmond de Rothschild partnered with Nucoro to launch a Cloud-native digital wealth management platform to enhance the client experience, dramatically increase operational efficiency and empower its advisors. Get in touch to learn more.

For more information about how Nucoro can help shape a hybrid wealth management proposition for your firm, get in touch.

This article was part of The Wealth Mosaic's Swiss WealthTech Landscape Report (2021). Access the full report here.

Key Ideas

  • Hybrid wealth management provides a more fluid customer experience.
  • Customers’ preferences have changed and hybrid advisory services are a key way to provide the experience they now expect.
  • Digitizing processes while keeping customers firmly front of mind requires an advanced, flexible and scalable platform.