Thought leadership

Thought leadership

Robo Advice and beyond. What are the gains?

Regulatory changes and the emergence of digital entrants into the wealth management space have indeed affected the industry in several ways. These along with the business objective of expanding the potential client base through the provision of better and more affordable services and improved client experience lead to seeking more suitable operational models.

How does a bank choose his canal of communication while most of people are used to mobile phone apps such as whattsapp or Facebook messenger? How to prevent frauds? In private banking trust between relationship managers and their clients play a primary role, it’s the essence of private banking existence.

With new regulatory frameworks, such as MiFID II, GDPR, etc. designed to safeguard operational integrity, customers’ suitability and data, firms need to revisit their strategies. In this context, a top priority for Wealth Management Firms is to comply with the latest regulation, while providing quality of service to clients. This adds a number of operational tasks to deal with on a daily basis that might out-focus from the long term objectives of the business, lower the quality of service and put a pressure on the profitability of the organisation.

Furthermore, customers are becoming more tech savvy and want to be connected instantly thus are expecting information and reporting at hand (on their mobile) something that contributes to better client interaction with the wealth managers, deriving from deploying modern technology tools that efficiently address market trends.

With these trends in mind, Wealth Management Firms operating in a traditional manner may find it hard to compete unless they embrace the evolution wave to the best of their interest. This can either be done through collaboration or through the use of FinTech tools that enhance their operations, improve internal efficiency, respond to client demands and finally increase total profitability. One of these, is the latest trend of Robo Advisor; many organisations might consider it as a foe given the existing number of robo advisory firms. However, everything is a matter of perspective and implementation.

Certainly, there are pros and cons in Robo Advisors, with cons being considered the fees, the lack of personal interaction and the target market. Nevertheless, if properly utilised, the advantages could outweigh the drawbacks, offering:

  • instant personalisation of service
  • profiling and re-profiling without the participation of a human
  • use of algorithms that minimise emotional errors
  • selection of fees
  • minimum amounts invested according to one’s pocket.

Leveraging the benefits of modern FinTech trends, applicable to a conventional environment, can result in a hybrid model service, providing customer-focused wealth management services, by combining technology-driven innovation and creative human wisdom. In this case, all or most of the standard processes will be automated, while time frees up to allow the manager to consider strategic portfolio construction and offer related and customisable services. As presented in a recent report, 10% or more of the world’s investable wealth may be managed by hybrid robos by 2025.

In this sense, robo advice presents an opportunity for Wealth Management Firms to access new mass markets and unlock the large potential of those under-served segments, in a way which allows the increase of their profitability. Advisors experience improved productivity and the ability to recommend comprehensive investment advice for clients’ best interest, without jeopardising compliance or resources.

Moreover, to competitively market their services, they can use tools to go beyond compliance and advice and offer a more interactive user experience. This is actually where the core added value of robo advice comes in. Robo advising is not just about the automation and digitalisation of the wealth management and private banking services; it provides advisors with next generation technology to address their market, the way it has already been addressed from vendors of other products and services. In a nutshell: “anytime & anywhere from any device”. That is to use the robo advisory tools to reach clients when needed, the way they prefer. By automating trivial reporting and data gathering, the capacity to serve is increased, while focusing on the particular needs of the clientele thus creating relationships, which help in managing risks and expectations. Finally, delivering a high level of service not limited to the high end (and more competitive segments) helps the organisation achieve higher client retention and profit margins.

In this case the tool is also complemented by human interaction (the hybrid model), which advances and differentiates in terms of building relationships and personalising the offering. Hybrid models balance the economics of human versus digital advice and service, offering efficiency with a human touch. Wealth Management Firms need to look upon robo advice as a way to gain access to undiscovered markets, in a seamless, scalable and cost-efficient manner. Therefore, using the systems that reduce the burden of administration, reporting and managing, gives more time to focus on the demanding client requirements, who will feel better served and remain loyal.

Profile Software develops solutions that enable Wealth Managers to leverage the opportunities in the marketplace and robo advice is fully supported in its product range. Axia Robo Advisor enables predefined and easily customisable processes for clients’ onboarding that cover self-registration, verification and profiling. The solution takes care of all the compliance and regulatory issues while keeping the client and / or advisor informed anytime and anywhere from any device. Rebalancing, for any reason, from the calculation, to order creation and routing is seamless and can adapt to the model of the organisation or the client requirements. The solution can be deployed as a completely self-service or as a hybrid model. The ready-to-use integration with numerous custodians, fund administrators and market data providers streamlines operations and supports end-to-end automation, where needed. Axia Robo Advisor with its cutting-edge technology achieves a unique user experience, delivering a complete offering of omni-channel wealth management services, adding significant value to their operations.

Author’s photo and short bio

Theodore is working in finance and technology industries since 1991. Experienced in developing, growing and expanding businesses, has closely worked with some legends of both industries in Greece and enjoys the appreciation of his colleagues and peers. As an asset manager, has exceeded the €100M mark in Assets under Management, from Greek clients, three times in his career help leading three different startups, which is a rare record. In technology, focuses in its combination with finance, strategy, M&A, team building and organisational strength. Being one among the few to having the opportunity to move between finance and technology, is currently a member of an international team and helps group's expansion and international establishment.

About Profile Software:

Founded in 1990, Profile Software ( is a specialised software solutions provider with offices in key financial centers and a presence in 35 countries across Europe, the Middle East, Asia, Africa and America delivering market-proven solutions to the Investment Management and Banking industries. Following the successful acquisition of Login SA, the Paris-based treasury software provider, the range of solutions offering has been enriched, whilst these can also be implemented as stand-alone. Profile Software is recognised as an established and trusted partner by international industry specific advisory firms. Profile Software’s solutions enable organisations to align their business and IT strategies, while providing the necessary business agility to proactively respond to the ever-changing market conditions.


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