The Digital Global Advisor

The improvement and expansion of Wealth Management products and services is tied to technological penetration in Financial Intermediaries' business propositions. However, ineffective change management processes and restrictive legacies hinder the race toward digitization in the Wealth Management industry. In this context, the COVID-19 emergence accelerated the implementation of technology solutions that allowed banks to maintain remote operations. This has made institutions and clients aware that the wealth management industry needs increasingly digital solutions to ensure responsiveness and flexibility in business models.

It is useful to point out that the growing needs of clients have pushed the Wealth Management industry to shift from a simple product sales logic to an advisory one. Phenomena such as the broadening of the client segments served by the industry (such as the Mass and Affluent segment) together with the increasing complexities of the services provided have posed obstacles to traditional business models based on the centrality of the advisor. For this reason, it is crucial to make the advisor's operations more efficient by providing digital tools that simplify and support his or her activities.

One of the most relevant data, which emerged from the Digital Global Advisory survey sponsored by CeTIF, shows that three years from now clients will increasingly demand services related to personal and family goal planning. As a result, advisors will have to reshape activities by trying to spend less time on operational activities such as allocating and managing portfolios or providing information related to financial markets. The technology solutions that have shown the most promise for tracking this goal are web collaboration, omnichannel platforms, and CRM enhancement. In addition, it emerged how banks are pursuing a hybrid strategy (characterized by a mix of physical and digital approaches) for improving processes related to the typical Wealth Management value chain.

However, the enrichment of the range of non-financial services provided by Wealth Management Institutions can generate risks for Financial Intermediaries. We refer, for example, to services such as real estate, business or art advisory consulting, for which it is necessary to assess, on a case-by-case basis, how they can be implemented and used within the Institution. Banks may consider whether to internalize such services or to outsource them, entrusting their management to third-party and experienced professionals. These types of integrations are developed in order to offer greater professionalism and end-to-end customer journey.

Finally, the potential that automated advice possesses for the purpose of bridging the so-called advice gap was discussed. That is, the difference between the demand and supply of professional wealth management services provided by traditional Banks. The results of the survey conducted by CONSOB (entitled "Italian investors and the propensity toward robo-advice") show that attitudinal, emotional and functional-relational factors underlie the search for automated advice propositions, where price is not a highly discriminating element. In particular, motivations such as objectivity of recommendation, propensity for cultural change, and a greater attitude toward shopping around are some of the main drivers for seeking automated advice solutions. However, fully automated models still appear to be far from large-scale implementations given the centrality of the advisor in the relationship with clients.