Why wealth managers need to change their business models
By International Adviser, 28 Sep 16
Faced with an increasing pressure on margins and the cost of regulatory compliance, EY gives five tips on how wealth managers can change their business models to weather the storm of digital disruption.
Digital channels
According data from EY, clients seem to generally downplay the importance of a face-to-face relationship with their wealth manager, with 59% admitting that websites and mobile capabilities will be their primary channel for receiving advice compared to branches (26%) in the next two to three years.
Advisors will need to spend less time providing standard asset allocation advice and other activities that can be automated by an algorithm or a robo, says EY.
“They will need to spend more time calming jittery nerves in choppy markets, helping clients drop bad spending habits and increase savings, assisting clients through a divorce and providing clients with the tools to achieve life and financial goals.
“In essence, the role of the financial advisor may become more like a financial therapist in the future.”
Robo-advice
High net-worth individuals (HNW) individuals have significantly greater awareness (63%) and are more likely to consider using a robo only 37% would consider using robo-advice.
The HNW segment interest creates an opportunity and a challenge for wealth managers. Firms with an existing automated advice offering may need to make their HNW clients more aware of it.
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Tags: EY | Wealth Management
