3 lessons wealth management firms can learn from robo-advisors

Although it has traditionally been slow to respond and adapt to technology, the wealth management industry is on the cusp of a digital revolution. Technology has not only driven demand for digital and 24/7 delivery, it has lowered barriers to entry, enabling agile new players to thrive.

New competitors in the form of robo-advisors — online platforms that use algorithms to offer financial advice at a fraction of the cost of a wealth manager — have been a rising force, doubling their assets under management (AUM) every few months. Although the current adoption rate is relatively low among high net worth individuals (HNWIs), clients of what some call these innovative “digital attackers” report levels of satisfaction five to 10 times higher than traditional wealth managers.

Meanwhile, only a third of HNWIs surveyed by PwC said they are satisfied with their current service and would recommend their wealth manager to others. The way forward for wealth management firms is clear: they must embrace change to remain competitive.

3 ways to get ahead

Here are three lessons wealth management firms can learn from robo-advisors:

1. Customer experience as a priority

By 2020, experts expect customer experience to overtake price and product as a key differentiator in the market. In a world where anyone can open a micro-investing account from their phone in under five minutes, providing a seamless client experience is crucial.

Robo-advisors treat client experience as a strategic priority — in fact, treating clients as clients before they become clients. This includes communicating with clients according to their preferences and providing customized advice according to their individual risk appetite, investment goals and life events.

Treating clients as clients before they become clients.

A streamlined customer journey is not only more efficient from a business perspective, it is the only way to attract new clients and retain existing ones.

2. Fast and paperless onboarding

The days of clients visiting a physical office to open a new account are numbered — that is, if they aren’t over already. To remain relevant and competitive in the digital era, firms need to adhere to the rule of quick, inexpensive and easy delivery.

For clients, paperless onboarding serves as the first impression of a mutually beneficial business relationship. For wealth managers, client onboarding that relies on paper-based forms involves repetitive data entry and extensive paperwork.

A digital onboarding process eliminates this administrative burden and enables wealth managers to focus on more value-adding activities. It’s an easy choice to make, as robo-advisors already leverage end-to-end digital onboarding processes to ensure lower costs, fewer errors and happier customers.

3. Efficient, intelligent automation

One of the biggest digital transformation challenges wealth management firms face is rigid legacy systems that are disconnected, resulting in disparate data sources and inefficient workflows. But there’s a solution. Consolidating data from client acquisition, digital onboarding, regulatory compliance, relationship management and business intelligence on a single platform provides you with a 360-degree view of each client, which significantly increases operational efficiency.

Meanwhile, process automation eliminates the need for manual intervention and data entry. For example, intelligent capture solutions can extract information and automatically route it to the relevant approver. All necessary reviews can be performed in seconds, rather than days, and compliance checks can return results instantly.

Intelligent process automation not only removes the administrative tasks that add little value, but also empowers managers to provide customers with faster, more accurate service.

Content services for wealth management

Wealth management firms that move too slowly to respond to the digital wave risk losing $79 million per billion dollars of revenue per year.

But this doesn’t mean you need to overhaul your services — in fact, the future of wealth management is more personalized than ever. Firms that can leverage technology to complement and enhance their advisors’ expertise and personalized service will have everything to gain.

Implementing a content services platform is a good first step in realizing this vision — as well as for immediate, measurable gains. The right platform enables a secure end-to-end digital process by capturing and storing documents electronically, eliminating the need for paper forms and manual verification.

Once stored, employees gain instant access to the information they need, when they need it, while document access and retention policies eliminate security risks. This speeds account opening, optimizes operations processes and provides a 360-view of each client, all in a completely compliant environment.

To learn more about how to deliver an exceptional client experience, download the ebook Overcoming the challenges of digital transformation in wealth management.

Steve Comer is the assistant vice president of financial services and insurance sales.
Steve Comer

Steve Comer

Steve Comer is the assistant vice president of financial services and insurance sales.

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