Technology for the high-touch wealth advisor

Gregory Smith of Accenture explains how digital tools can help unlock more time for valuable conversations

Technology for the high-touch wealth advisor

For the wealth management industry, maintaining a high-touch value proposition while taking a digital approach might sound like an exercise in contradictions. But to someone like Gregory Smith, it’s an idea whose time has come.

“We really are at a point now in 2020 where the need to embrace the digital, the innovative, and the technological is undeniable,” said the managing director and Wealth Management Lead at Accenture in Canada. Accenture’s research identified that 40% of Canadian investors feel traditional advising is not enough. “Wealth managers have to get together as a team — advisors with compliance, manufacturing, and distribution — to more quickly decide where we’re going, share the roadmap with our people, and really just get on with it.”

The rise of platform technology has upended multiple industries: transportation, entertainment media, and commerce have all arguably been upended to create efficiencies that cut consumer costs and undermine traditional players’ selling propositions. But Smith argues, quite persuasively, that technology can be used to put together more high-value offerings when it comes to wealth management.                                            

“We know about the typical wealth cycle: much of the managed wealth in the mid-tier millionaire segment is created within the first generation,” Smith said. “Entrepreneurs get windfalls, which they may celebrate by buying cars, houses, and other material things for themselves. After that, they think about how to care their family through things like trusts, estate planning, and insurance planning. Then they move on to giving back to society, which can involve philanthropy or charitable giving to transfer assets to worthy institutions or causes.”

With a focus on goals-based planning, an approach that seeks to gently nudge clients away from a “beat the benchmark” investment mindset, more advisors than ever are challenged to be keenly aware of clients’ life objectives, values, and passions. Each high-net worth household has its own story, and staying abreast can be difficult given how much attention day-to-day work can require.

At some firms, the judicious use of CRM capabilities with an advisor desktop allows for appropriate gathering of client information, regular contact management, and external data monitoring and analysis. “We’re seeing leading firms look at social media, for example, to catch news items or other updates that involve their clients,” Smith said. “What do we know about a client who, for example, has recently been promoted, who’s had a press release of a major step forward at their business, and how do we monitor that so we can, at the very least, congratulate them – if not connect with the client to revise their financial plan?”

Based on recent work they’ve done in the high-net-worth space, Accenture found that HNWIs’ top passions tended to revolve around business, suggesting a need for wealth advisors to go beyond thinking about stocks and bonds, but to also partner with corporate bankers to genuinely engage with business owners. Innovations in renewables and biotech, sports, and lifestyle got honourable mentions, indicating opportunities to maintain relationships by sharing relevant content.

Technology also has a role in financial planning, Smith noted, as rules of thumb regarding decumulation collapse in the face of a volatile market environment, longevity, health concerns, and next-generation wealth transfers. Fifty percent of Canadian investors consider new technologies if they provide broader product offerings, while 52% of Canadian investors believe anyone with the right tools can match traditional advisors. By understanding and applying tools such as machine learning, artificial intelligence, and Monte Carlo simulations, he said advisors can construct a more optimal glide path for clients looking to liquidate their nest egg. With technology that incorporates knowledge of the many factors and coefficients that go into someone’s retirement paycheque being developed by Fintechs, aspects of the decumulation discussion will be enhanced significantly with automation, accuracy as well as tangible action plan.

“There’s also a crucial moment of truth that comes when an advisor sits down with a 60-something client and says ‘I want to give you peace of mind,’ then explains how, why, and where to liquidate in a very elegant, tax-effective way that satisfies their needs and goals,” he said. “Considering how many households the average advisor is managing, the number of investors approaching retirement age, and the tax implications that have to be studied, there’s no way an advisor can do what they need to by manually going over their own spreadsheets.”

More time can be freed up for important discussions by creating more efficient back-office processes. Especially when it comes to compliance with emerging Client Focused Reforms, Smith touted the benefits of human-centred design principles to integrate compliance, sales, relationship management, and financial planning. Data analytics, robotic process automation, and machine learning applied to compliance processes – also known as “Regtech” – to assess risk of infractions, can be invaluable to firms that integrate and leverage those technologies properly.

“You mustn’t try to accomplish it in a manual, kind of 1990s approach,” Smith said. “We’re well into the 21st century, so we have to apply more technology and rely on fewer bodies pushing paper.”


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