Digital Tools and Practices for Transforming and Scaling the Investment Offering
Rafael Weber of Swissquote
Dec 21, 2022
Delivery of a relevant, personalised and realistic investment product suite and investment advisory offering is essential for success in tomorrow’s world of wealth management. Our panel of experts analysed where technology solutions can help the banks and other players improve their investment offerings, not only in terms of the product suite and platform but also the delivery of RM-led communication, advisory and discretionary portfolio management. They discussed how the wealth industry needs to connect and interact with and leverage the skills and capabilities of the digital investment and custody platforms, as well as the private banks. They also analysed how wealth management organisations competing in the Asia region can best adopt and also assimilate these innovative technologies to enhance their investment propositions. And they looked ahead to what the next suite of solutions might be.
Chair: Rafael Weber, Head of Institutional Clients, Swissquote
- Nicole Bodack, Managing Director, C&IB, Wealth & Asset Management, APAC, Accenture
- Ritesh Ganeriwal, Head of Investment Advisory, Syfe
- Carolyn Leng, Managing Director, Bordier & Cie
Selected Key Observations:
Technology solutions help banks and other wealth management providers improve their investment offering, and deliver a better platform and product suite, and at the same time for certain providers boost the RM/advisor capabilities
An expert explained that they know from their research across the region that clients want individualised, personalised recommendations and they want proper advice, and in the right contexts, even if they make the final investment decisions themselves.
She said many clients are asking them for help with scale, for example with delivering what they call digital discretionary, or DPM delivered digitally for the mass affluent. She added that you cannot use RMs all the time, the economics do not work, so new offerings could be digital discretionary, which you can very well be delivered through robo-advisory or digital platforms, or the digital arms of the banks.
The key thing is it needs to be really easy for customers, building up from simple offerings towards more sophisticated investments, goals-based, theme based, ESG, whatever that might be, this same expert explained.
And the offerings can be tailored to retail or mass affluent buyers, or to accredited investors, for example for private assets or alternatives. And she explained that money can be allocated to different digital platforms, or to the banks, depending on the level of offering and service that the client wants.
But she said whatever route taken, people do not want product pushing, they want advice that is in the context of their individual lives and what they need and hope for.
Technology can help scale and improve investment platforms and portfolio solutions
A guest explained that to help scale their proposition, their robo platform has a proprietary order management system and fund management system. Instead of placing orders one by one for each client, they aggregate, and disaggregate. The investors don’t need to think too much about orders, and dividends are reinvested, with lots of steps embedded, allowing the customers to simply focus on their goals rather than fretting about portfolios and reinvesting and so forth.
He explained that the digital platforms have also evolved to cater to more personalised needs of the clients, going from more discretionary-only portfolios to offering custom portfolios. “We have thereby become more of an all-in-one or one stop platform where you can invest in a globally diversified, passively managed investment portfolio for your long-term needs,” he said, “or you can invest short-term in cash management products, or you can custom build your own portfolio, perhaps even buy individual securities.”
The next step, he commented, was having built up trust, to boost advice and win over a greater share of wallet from each customer. “The next stage is going to be the personalised outcome-oriented advice platform, which kind of ties all of this together because there are these missing dots, like there are plenty of investment options now but how do we tie those investment options to end results that a customer is looking for,” he explained.
Wealth transition and the rise of the younger generations will boost digital investment offerings
A bankers observed that Asia’s great wealth transfer from the older and founder generations is underway, with trillions of dollars of wealth shifting in the coming decades to younger hands. Moreover, younger clients are making their wealth at younger ages, especially in the technology fields. Even for the UHNW clients, she explained the digital also means speed of reaction and help being more proactive in investments, so across the board there will be rapidly rising demand for digital solutions. She said that from the mass affluent segment where it is not possible economically to service clients individually, to the UHNW segment where an advisor led- but digitally enhanced offering is increasingly vital.
“How do we then differentiate the servicing level between the private banking clients vis-à-vis your mass affluent?” she pondered, answering her own question by explaining that digital is there to support the RMs and advisors for wealthier private clients whose value-added lies in their knowledge, expertise and judgement. “Digital simply helps push you to the next level,” she explained.
Hybrid wealth management aligns the best that digital and the human advisor can provide
Another expert highlighted the time that technology and automation can free up for the RMs and advisors to focus their skills on their client relationships. In the lower segments it is a digital first, or mostly digital model, and in the upper segments the digital solutions are more for empowering the advisors and improving the client experience.
“You need to be profitable,” she said, and we are constantly asked how banks can up their ratio of clients to advisors, in other words to achieve greater scale.” But she said it depends on segmentation, with the ratio of RMs to clients rising the lower the AUM in question.
“Everyone is investing in digital technology and channels and experiences and trying to move as much as possible online across all product ranges,” she added. “For example, even e-trading for more complex products is a massive push taking place, and that frees up the relationship manager for other things that really matter. But actually, our study shows that the progress is slow, we see that half of the RM’s time is still spent on non-value-added activities.” And she added that with RM and advisor hiring at pace across Asia, there are simply not enough RMs around, meaning that digital is far from a luxury, it is a necessity.
And another expert said that in their digital-first world of investments, their next mission must be to deliver goals-based and more personalised advice at scale through digital solutions and channels.
Digital should not be daunting for clients; it needs to be simple and easy to use
A banker observed that digital solutions are clearly easier to understand for younger clients, but across the board, for the older clients as well, who might be in the 70s or 80s even, they need digital solutions that are simple to understand and use
Head of Institutional Clients at Swissquote
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