With digital and hybrid advice, there is naturally a lot of focus on achieving a low-cost solution, which means advice can be made available to more people.
In effect, this means getting clients to do more for themselves, with less time spent by expensive paraplanners and advisers.
But it is all for nothing if clients don’t actively engage with the process.
The absence of any human contact is the major perceived disadvantage of online-only interactions with clients. Maintaining the human touch is the missing link in any successful delivery of digital advice.
To keep costs down, it is necessary to limit the time spent by human advisers and support staff
The importance of face-to-face communication in informing and engaging clients – and, most importantly, reassuring them about the financial decisions they’re making – must never be underestimated.
With digital and hybrid advice, there is, of course, some human involvement at appropriate times. This interaction needs to be designed to maximise effectiveness. However, to keep costs down, it is necessary to limit the time spent by human advisers and support staff to affordable levels.
Unsurprisingly, finding ways to meet the resulting gap in human interaction is one of the key elements to success.
Face-to-face there are many human communication techniques – often subtle and intuitive – which inform, engage and reassure clients.
Compensating for the absence of face-to-face communication needs to be based on learnings from behavioural science and human psychology.
There is no one solution and, as with everything associated with hybrid and digital advice, a process of sustained continuous improvement based on management information and feedback will be needed to achieve the best outcome.
Behavioural science offers many useful techniques, such as nudges, which can be deployed to promote positive behaviours. Nudges can be built around events such as reaching a milestone age or anniversary, or used when charting progress towards the desired outcome.
The ‘quantified self’ is the human fascination with data centred on us
Financial services can learn from other sectors when it comes to charting progress – for example, health and fitness apps.
Apps like Noom, Fitbit and Strava draw on the concept of the ‘quantified self’, which is the cultural phenomenon of self-tracking using technology and the related human fascination with data centred on us. Such apps frequently feature process goals and promote habit formation.
A similar approach may be applied to digital and hybrid advice through an engagement app and implemented during the advice process.
Successful engagement with financial planning would benefit from employing various underpins derived from behavioural science and human psychology, including personality profiling.
Personality types can be ascertained from overt questions, subtle gating based on interactions with the embedded content and data such as that derived via online banking.
Based on personality profiling, technology can produce different variations of text, graphics, questions and other content to create a highly personalised experience.
From the questions asked and the information collected, clients can be assigned to one of a number of personality types. These personality types can be mapped to high-level descriptions of likely approaches to money and financial planning.
Actualising people see money as a means of fulfilling dreams and look for meaning based on personal values
We can start by using four high-level personality types – conservative, experiential, actualising and strategic – and the user journey can then be personalised accordingly:
- Conservatives like security, peace of mind and reassurance their financial affairs are being looked after. They value facts and clear outcomes.
- Experientials care about their lifestyle, both now and in the future, and want to avoid worries that distract them from engaging with life. They enjoy sensate experiences and actively engage with the steps of the journey.
- Actualising people see money as a means of fulfilling dreams and look for meaning based on personal values. Relationships are important; they want a virtual ‘collaborative business partner’ to work with.
- Strategics see managing money as a challenge and a skill to be mastered. Technical information and explanations of tactics and results are important to them.
Achieving high levels of client engagement, while reducing the need for human support during a digital and hybrid advice journey, is without doubt challenging. It is important to first establish the principles and then apply them to continue to improve the client experience.
Firms embracing this approach will not only delight clients but will also be rewarded for achieving a significant and sustainable competitive advantage.
Chet Velani is managing director at EV
