Thought Leadership
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September 04, 2020
Hyper-personalized Wealth Advisories for Today’s Investor
Dinesh Venugopal
President – Mphasis Direct and Digital
Tags: leadership

COVID-19 has put the relationship between wealth advisors and investors to the test. In the new economic landscape, every investor will re-prioritize investments, savings and expenditure. A recent report reveals that 33 percent of high-net-worth individuals (HNWIs) are uncomfortable with wealth advisory fees. It also discloses that HNWIs prioritize investment performance and service-based fees over asset-based fees[1]. These trends signal the need for immediate transformation of traditional wealth advisories. The pandemic allows conservative wealth management firms and advisors to pause and renew their relationship with investors by identifying gaps and bringing in the magic of hyper-personalization. They need to hyper-personalize advice by leveraging cloud and cognitive-driven technology solutions as an enabler, not as a competitor.


The right infrastructure

Many traditional applications, integral to wealth management, can drive greater value from the cloud. By migrating to the cloud, enterprises can cut costs and manage large volumes of data effectively. The cloud removes the need for data centers and servers, while enabling effective document control and management.

Firms should build a resilient cloud strategy and experiment with a mix of private, public and hybrid clouds to deliver the right results. A comprehensive cloud-based solution should digitize and integrate multiple functions for an advisor—onboarding, back office, trading and compliance. A great example is the Advisor Access platform from Raymond James. This cloud-based wealth management platform, available to advisors on a smartphone or tablet, consolidates information about the client, practice, security and risks, helping advisors hyper-personalize services[2].


Smart operations

Undoubtedly, automated robotic advisors have enhanced the speed, accuracy and experience of wealth advisory solutions. The pandemic accelerates robotic advisor growth further, as forecasts estimate that it will touch the USD1.5 trillion mark by 2023[3].

Lean methodology, robotic process automation (RPA), analytics and digital technologies can solve challenges in onboarding, trading operations and compliance solutions. For instance, robotic automation can automate asset transfers and cash flows.

According to reports, an economist of UBS wealth management practice predicts increased investments in automation and robotics as economies battle COVID-19[4]. At the same time, artificial intelligence (AI)-enabled platforms can improve core processes and incorporate behavioral finance elements in client engagement and advice tools. Cognitive solutions that leverage AI can further increase productivity across the front, middle and back-office.

Intelligent automation can now streamline labor-intensive tasks, rebalance accounts and monitor portfolios seamlessly. Take, for example, UBS Advise Advantage, a digital service from one of the leading wealth management firms in the world. It builds customized portfolios through automated reinvesting, rebalancing and tax loss harvesting[5].

Natural language processing framework, advanced analytics and visualization offer great opportunities in hyper-personalization. Wealth management companies can make processes more user-friendly and welcoming. An example of such a program is Bank of America's Merrill Guided Investing platform that launched a feature in 2019, allowing clients to set personalized goal targets—retirement, large purchases, or other goals. The platform also allows the addition of external assets, such as social security assets, helping clients estimate future incomes and track progress towards goals[6].

Ultimately, the success of wealth management relies on technology to drive hyper-personalized investor-advisor relationships. With the right tools, advisors can customize portfolios for different generations of investors with diverse preferences, beliefs, and habits.










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