Technology is playing an increasing part in the advice process, but the story has largely been about helping advisers to run their business more efficiently, and enabling them to deal with less wealthy clients at a profit.
The benefits of tech-based solutions to high-net-worth (HNW) clients have received less attention, almost as if there is nothing they can do to enhance this group’s experience.
Logic in the advice sector dictates that the greater someone’s wealth, the more likely it is their needs will be complex and they will expect a very personal service. But common perceptions of digital and hybrid advice solutions do not easily fit that profile. These propositions are often aimed at clients who are building their wealth, or as a stopgap for clients’ children who will eventually progress to ‘full’ financial advice once they receive their inheritance.
Advice firms will be better able to cater for this ‘on demand’ style of service by embracing technology
The personal service that wealthier clients are willing to pay for is often equated with face-to-face advice, with the value of human relationships taking precedence over the benefits of tech. But is tech more important to HNW clients than it may seem?
Better service
“I sometimes hear this odd trope rolled out — that high-net-worth and ultra-high-net-worth clients don’t want technology in their wealth advice,” says James Tucker, founder of adviser tech firm Twenty7tec.
“Given the sophistication of family offices and the wealth practices that advise the wealthy, this seems unlikely and completely outdated to me.”
This accessibility poses a challenge for advice providers because the cost of technology engagement doesn’t change across client segments
Others agree. Financial Technology Research Centre founder and director Ian McKenna observes that wealthy people can afford to buy the latest tech from the likes of Apple, and often are keen to experience what it can do for them in relation to financial planning.
McKenna shares an anecdote about a ‘quasi-private office’ that used tech to identify when a client’s fleet of cars needed servicing; among other things that went well beyond the remit of wealth management.
“If you look after £50m of someone’s wealth and you say you want to spend £500,000 [of their money] to get them a better service, they will say yes,” he says.
However, McKenna points out that advice firms using tech to enhance their offering to HNW clients need to be aware of the tricky balance between creating a user-friendly experience and providing sufficient cyber security.
Some advisers assume older people are less tech savvy, but it’s not age prescriptive
“In this context, especially if you’ve got really wealthy clients, they are an enormous target for cyber attacks,” he says.
Tech can help to provide a better service for wealthy clients who are ‘asset rich but time poor’. For busy clients who may be travelling around the world for both work and leisure, the ability to self-serve can be a useful option to have — as an addition to quality time with their adviser rather than as a cheap alternative to it.
The adviser can’t be available 24/7 as they too have a personal life, but a client portal provides useful information around the clock.
We know not everyone wants to sit there wearing a virtual reality headset
“Ease of engagement, speed and accurate access to information are what’s important for the client here,” says Intelliflo chief sales officer Johann Koch.
“Clients who choose to self-serve digitally can do it on their own time and can make the process quicker. It gives them access to a library of personal advice documents, their net worth and portfolio in an aggregated and user-friendly digital format.”
Client portals can help wealthy but time-poor clients maintain a close relationship with their adviser in a secure way. Video meetings, webchats and audio calls enable wealthy clients to communicate with their adviser wherever they happen to be in the world, and can be easily squeezed in between other commitments in a way that would not be possible for in-person meetings.
You need look only at the huge rise in the use of streaming services in recent years to see the appetite for on-demand services
Advisers, meanwhile, find cashflow modelling tools useful in meetings with HNW clients. These can visually bring to life elements of financial planning that otherwise may take longer to explain.
Convenience
High levels of convenience are important to wealthy clients, but delivering this through tech can present some problems.
“This accessibility poses a challenge for advice providers because the cost of technology engagement doesn’t change across client segments,” says Brooks Macdonald chief technology officer Caroline Abbondanza.
“It means providers must find new ways to differentiate their services for high-net-worth clients.
if you’ve got really wealthy clients, they are an enormous target for cyber attacks
“This might mean offering tailored advice, personalised recommendations or unique investment opportunities that align with the individual client’s goals.”
Returning to McKenna’s anecdote about the ‘quasi-private office’, tech gives advisers the potential to take personal service to a different level and fully tailor it to clients’ requirements.
The key thing is to understand and respond to each client’s preferences for how they want to communicate and be served, rather than make assumptions.
“Some advisers assume older people are less tech savvy, but it’s not age prescriptive,” says SG Kleinwort Hambros head of client solutions Delyth Richards.
“The way in which we are all engaging with clients is transforming, with the flexibility to react to different client needs.”
The emphasis throughout is the need to be technology driven and with a focus on personalisation and efficiency
Richards says clients are increasingly accessing the firm’s services online through a client portal, with a number of clients preferring 24/7 internet access to the traditional method of calling their adviser during office hours.
“But clients do like to talk to people as opposed to sending messages,” says Richards.
“They still value the ability to speak to someone. It’s what they expect in terms of personal support.”
On demand
Sesame Bankhall Group chief operating officer Richard Howells makes an interesting observation about the customer experience. The service commonly received in sectors outside financial services these days, he says, can drive wealthy clients’ expectations of the service they receive from their financial adviser.
Ease of engagement, speed and accurate access to information are what’s important for the client here
“You need look only at the huge rise in the use of streaming services in recent years to see the appetite for on-demand services, where a series of programmes can be rapidly consumed at a time that suits the customer,” he says.
Clients don’t necessarily need a quarterly or monthly meeting with their adviser, in Howells’ opinion, but they do expect to be able to set their preferences and have them met at the touch of a button.
“Advice firms will be far more likely to be able to cater for this ‘on demand’ style of service by embracing and utilising technology and data,” he adds. “The emphasis throughout is the need to be technology driven and with a focus on personalisation and efficiency.”
The way in which we are all engaging with clients is transforming, with the flexibility to react to different client needs
This is exactly what firms dealing with wealthy clients are doing. Advice firm Johnston Carmichael Wealth has a digital factfind that enables clients to provide the hard facts in advance of meeting their adviser, which frees up time to spend on activities that are more meaningful to the client.
There are similar stories at SG Kleinwort Hambros and Arbuthnot Latham, where tech gives HNW clients the option to provide information digitally in advance of meetings with their adviser, if that is what they prefer.
There are no expectations or assumptions around clients doing this — the tech is there to use however it works for them.
Sometimes the use of tech for wealthy clients may have little to do with financial planning and everything to do with providing some additional touches that show these clients — who can afford to take their business anywhere — they are not taken for granted.
I hear this odd trope — that HNW and ultra-HNW clients don’t want tech in their wealth advice. This seems unlikely
“At SG Kleinwort Hambros we are part of the SG Group, which has a large art collection,” says Richards.
“We are looking at how the metaverse may allow clients access to that where they are not able to travel.
“But at the same time we know not everyone wants to sit there wearing a virtual reality headset.”
This article featured in the May 2023 edition of MM.
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