Personalization at Scale with Hybrid Advice

For many years now changing client expectations, shrinking margins and back office inefficiencies have been putting the traditional, advisor-led financial and insurance distribution models under increasing pressure. 

Robo-advice had promised to answer these challenges, and even today venture investment remains strong, exceeding half a billion dollars in 2018. Yet most digital-only B2C services remain unprofitable, and even some traditional wealth management market leaders have tried and failed to make them work. These recent experiences have shown that it is difficult to serve clients purely online, as money is a delicate subject and many need human support and guidance. 

Are there viable alternatives? Hybrid models have been gaining traction recently: combinations of the in-person services that clients are used to and like, supercharged with the efficiency of digital.

They are promising, leveraging technology and an omni-channel approach to improve the efficiency of relationship manager-only models, and allowing digital-first clients to benefit from a human touch. The resulting solutions take many forms: some utilize robo-advisory as a baseline and provide human support on-request, others assign specific advisors to specific clients, but with more interaction happening remotely to improve advisor efficiency and many are advisor-led with self-service monitoring. Though hybrid advice can manifest is many ways, it is at its core the provision of services through a combination of channels appropriate to the client and the level of service.

A key approach to making this model work is the streamlining and facilitation of the investor’s access to the advisor at the smallest possible cost to the advisor, both in terms of time and money. Systems for online chat, audio and video conferencing, screen-sharing, co-browsing, white-boarding, and file-sharing are now mature and are being used in wealth management.

Prometeia’s PFTPro front office platform seamlessly integrates these capabilities into relationship manager workflows, leading to quick, easy contacts and significant performance and efficiency improvements. Furthermore, Prometeia’s processes also aim to assist advisors with digital tools and automations which add value, but crucially recognize their expertise and allow for incremental adoption by each advisor according to their preferences. Such practical enhancements, in proposal automation for example, help increase the productivity of both traditional and hybrid models.

That is not to say that hybrid advice is always the right solution; though it can be more efficient than traditional models, it is still less scalable and more expensive than pure robo options. Furthermore, research suggests that maintaining client engagement through remote channels can prove difficult. To deal with this challenge, Prometeia is continually working on additional strategies to improve customer engagement and everything that goes with it: loyalty, retention, effectiveness, growth and advocacy.

Personalization, for example, has been proven to increase engagement significantly. The USAA found that just 2 personalized messages via their banking app led to an increase of 10% in the frequency of client interactions. These personalized interactions make an investor feel valued and respected, and are what shape their experience, allowing wealth managers to differentiate as financial products become commoditized.

To personalize effectively, intermediaries should understand and anticipate their clients’ needs and interests and orchestrate a set of tailored experiences to address them across channels. Such a needs-driven hybrid approach is founded on the adoption of innovative technologies, processes, and data, and is becoming a key feature of modern front office platforms such as Prometeia’s PFTPro.

As the first step in crafting a sustainable personalization strategy, institutions should ask themselves: What do our clients care about? Where can we add value? What should the resulting client journey be? Each wealth manager is different, with diverse clients. Once the approach and areas of focus are established, personalization is an exercise in collecting, processing and understanding client data and resulting analytics.

Data collection can usually start inside the institution, which already holds a wide range of rich information about existing clients, accounts, portfolios and individual investments. This can be further augmented by data from a series of different sources. Questionnaires can play an important role, enhanced with gamification strategies or asked in context of an advisory session and analyzed on the spot, so that the client immediately receives value from the information they share. Open data is another potential source, along with predictive modelling using artificial intelligence and machine learning alongside classic econometrics. Semantic interpretation can also be a valuable source, although it is still in its infancy.

Prometeia’s approach then calls for feeding this data through a set of processes and algorithms intended to identify the intensity of each need for each specific client or household. Once a precise set of needs is identified for each client, an analysis of their portfolio allows the system to understand to what degree these needs are already being met, yielding a personalized gap analysis, with a prioritization to guide the client.

The resulting needs analysis then triggers personalized journeys to communicate, explore and address each need with the client. First, an in-app message, internet banking alert or a word from the advisor at the next meeting can make the client aware that they might have a need at all. If the client is interested in finding out more, an interactive exploration and fine-tuning of the need takes place, led by the advisor or via a self-service channel.

This exploration is a personalized story, illustrated with an interactive analysis of that client’s current and future situation, using the same analytics which identified the need in the first place.

If the client confirms the need, the story can culminate in a proposal that satisfies that need, with Prometeia’s advanced proprietary methodologies to find the right combination of products and services. The client views the final recommendation as catered to them, because it is tailored to their specific needs and situation, even though it has been generated on a large scale and can be delivered via self-service channels.

Where pure-robo journeys are too impersonal and traditional advisory too expensive, the hybrid personalization approach can lead to significant competitive advantage, especially for early movers.

Prometeia’s software, data and consultancy services have already helped a series of large and small institutions put needs-driven hybrid advisory for financial and insurance products into production. Live, serving clients, today.

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