The rise of robo-advice provides wealth management firms with the opportunity to forge stronger customer relationships—as well as attract desirable target segments and future clients.

One ongoing debate in wealth management advice is focused on either/or—as in, will the future favor human advisors or robots? In Accenture’s view, the future isn’t about either/or. It’s about and, as in humans and robots, working together to improve outcomes for customers.

Accenture research of more than 1300 investors shows the majority of clients prefer hybrid advice that is delivered through a combination of human and robot interaction. Notably, the hybrid model is especially popular with Millennials and Gen Xers, who will become the future mainstay of the wealth management industry. It’s also well-received by desirable target segments, especially the Emerging Wealthy (defined as individuals with $650,000 to $1.5 million in investible assets, not including the value of their home) and High Net Worth Investors ($1.5 to $10 million).

Yesterday’s differentiator is today’s table stakes

For traditional investment firms, some elements of the hybrid model might seem counterintuitive. For example, self-directed investing may seem like relinquishing control to the customer, but that—plus the perceived transparency that comes with it—is precisely what will strengthen the customer’s relationship with the firm and advisor. It also addresses the fact that, according to Accenture research, customers have increasingly high expectations for the digital tools available to them and their advisor: yesterday’s differentiator is today’s table stakes.

Just as banks consider how to offer living services and insurers develop a platform-based strategy to capture the value of ecosystems, wealth management firms must adapt to their customers’ desire for hybrid advice. To learn more about Accenture research on the promise of hybrid advice, download The New Face of Wealth Management: In the era of hybrid advice.

The future of financial services

Across the financial services industry, players must recognize the irreversible shifts that have taken place in customer expectations, technology and new competition, and formulate a plan for their future survival. Enacting incremental change or optimizing existing capabilities is not enough. Digital transformation is just the beginning—think of it as the first step to unlocking innovative business models, new revenue streams and new customer segments. For organizations prepared to do the work, the future is bright.

If you’d like to discuss how Accenture can help your financial institution capture the opportunities that digital transformation unlocks, please get in touch.

 

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