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Wealth managers' hybrid offerings not yet up to scratch against retail-friendly robos

Katie Royals, 18/04/2019

Recent research from Octopus Investments revealed that advisers believe a hybrid model of technology driven and face-to-face service is the future of financial advice. Thewealthnet spoke to a range of wealth managers to find out what they are doing in this space.

Taking the term ‘hybrid’ broadly, Ruth Handcock, chief executive of Octopus Investments, said “more and more firms are incorporating technology”.

Meanwhile Dolfin’s chief operations officer Amir Nabi (pictured) said the process “has already begun and will only speed up from here”.

“The ability to interact and transact seamlessly via digital channels has come to be expected in every sphere of life. There is no doubt that clients want to manage their money with all the convenience they have become accustomed to when shopping, communicating or learning online,” he added.

Currently, the most common hybrid models come from ‘robo-only’ advisers like Nutmeg who are beginning to introduce human advisers too. Ms Handcock explained there’s no reason this couldn’t go the other way with traditional advisers offering digital services. She hopes the two options will “eventually meet in the middle” as this “would offer consumers more choice”.

Meanwhile, younger firms like Dolfin are adopting ‘bionic wealth management’, which means they combine wealth managers’ use of technology with traditional advice on more complex, client-specific matters.

“Crucially, it allows advisors to focus on what they do best: providing the human touch,” Mr Nabi said.

Of course, there are risks to adopting technology and “any business will find problems” when changing their systems. However, talent, which “is a huge strategic imperative”, is a key way to mitigate this risk, Ms Handcock stated.

Mr Nabi argued that the risk could be in not adopting technology. He cited a 2017 report from Roubini ThoughtLab called ‘Wealth and Asset Management 2022’, which claimed that wealth management firms could lose $79.2 million per billion dollars of revenue a year if they don’t upgrade their digital experience.

Client feedback suggests the preference is for retail-friendly fintec...


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