Gary Skovron.13 July 2020

Hyper-personalisation is the future of Wealth Management?

Today’s competitive wealth management landscape is driving HNWI’s to demand more of wealth managers, more specifically hyper-personalisation for the future. As they seek to harness the benefits of real-time data and intelligence insights.

We built ARQ with this in mind; to empower advisors and enable investors by leveraging technology to create the most impactful, hyper-personalised and independent wealth experience of the future to meet changing client expectations in wealth management.

Today’s competitive wealth management landscape has driven high-net worth clients to demand more of their wealth managers, as they seek to harness the benefits of real-time data and intelligence insights.

What is driving of Hyper-Personalisation in Wealth Management

Firstly, connecting well with clients and understanding their priorities is fundamental to maximising advisor effectiveness. Yet a lack of customised advice is damaging the personal relationship between investors and wealth managers.

Only 40% of HNWIs are satisfied with their wealth managers.

In reality, many attribute this disconnect to the fact that their wealth managers do not know them well personally, whilst 28% highlighted their manager’s lack of emotional intelligence.

Therefore, the emphasis is now on advisors to deliver relevant and engaging content to clients through the provision of a hyper-personalised service.

And the best way to do this? Technology.

The great paradox of 21st century wealth management is that improved human relationships and a deeper understanding of clients can be achieved through artificial intelligence (AI) and machine learning (ML) techniques.

A digital solution to an emotional problem.

The digital disruption generated by FinTechs and BigTechs is another major driver of hyper-personalisation. Their incursions into the wealth management industry have brought high technology to the world of high finance.

The digital disruption generated by FinTechs and BigTechs is another major driver of hyper-personalisation. Their incursions into the wealth management are forcing traditional wealth management firms to redefine their business models in order to carve out a competitive advantage in a new, techno-centric world of big data, low-cost services and established networks.

Implications for wealth management

A new generation of tech-savvy HNWIs is driving the need for technology-led change. And they are embracing automated tools for a more comprehensive and individualised experience.

In fact, wealth management firms are increasingly leveraging AI-driven predictive analytics to analyse client behaviour and preferences to provide next-best actions in terms of investment decisions.

Younger HNWIs and mass-affluent investors in particular, expect customised portfolios that consider their emotional response to investments. For example by taking into account risk-taking ability and sector variation. 

Wealth managers also reap the benefits of portfolio customisation. They can differentiate themselves in a market where the traditional wealth-based customer segmentation approach still heavily prevails.

By harnessing technology, advisors in wealth management can unlock new insights to deliver a hyper-personalised wealth experience in the future. This enhances their effectiveness, resulting in higher rates of client satisfaction.

In fact, 82% of executives surveyed by Temenos and Forbes believe that wealth managers who increase product personalisation will succeed.

The ones that do will leave behind the rest.

The hybrid investment approach will shape the future of wealth management. Combining WealthTech with the personalised insights of advisors. Since Clients still believe that advisors have an outsize influence over returns, even if aided by AI. Ultimately, wealth managers will be distinguished by their use of technology and their ability to turn data into insights; those who succeed will be rewarded with client loyalty. 

Where ARQ sits

We have designed ARQ’s wealth management software to specifically meet the evolving needs and expectations of HNW investors. Recognising the importance of gaining an in-depth, emotional understanding of investors to better serve them. We strongly believe that hyper-personalisation is the future of wealth management. Our functionalities let users find out about their financial behaviour. We do this by generating a personalised DNA report highlighting: investment decision patterns, communication style, motivations and reactions to market events.

As a result, we harness AI-driven technology to put the client at the centre of their personalised wealth experience. Our intelligent tools analyse vast quantities of data. To provide a transparent overview of your investment performance and a comparison of your performance with others.

And we empower advisors by enabling them to leverage our technology and data analytics. To provide actionable insights and make better-informed decisions for clients. Therefore we facilitate enhanced advisor-client relationships by providing a truly personalised and rich client experience.

Ultimately, the coronavirus has compounded the pressure to strengthen personalised services. Clients want to know they are getting bespoke advice tailored to their needs and concerns. Firms will need to support the ambitions of their wealth managers. To help them navigate the rise of WealthTech by providing productivity-enhancing technological capabilities.

By Sasha Skovron


Sources:

https://www.capgemini.com/wp-content/uploads/2019/12/Wealth-Mangaement-Trends-Book-2020-1.pdf

https://worldwealthreport.com/

https://www.forbes.com/sites/insights-temenos/2019/06/17/empowered-by-technology-wealth-managers-will-take-personalization-to-the-next-level/#440586dd38c4

https://www.temenos.com/news/2019/06/17/report-says-private-banks-must-offer-highly-personalized-service/

https://www.ft.com/content/7ebfa850-bf2d-11e9-9381-78bab8a70848