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How Techology Affects Wealth Advisors - Views From The Frontlines

Jackie Bennion, Deputy Editor, 9 October 2019

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Among the observations, conversations need to move away from age, segments, Millennials versus non-Millennials to really understanding where the resistance is to change and adapting to clients’ needs.

Consultancy firm Capco last week assured wealth managers that there is a no winner-takes-all strategy when it comes to the role of the advisor. “Successful wealth managers will be those who keep client relationships at the heart of their thinking, and view digital innovation as an enabler rather than a silver bullet,” the firm said in a latest review of industry practices. It said client relationships are just as important as investment performance and digital services.

With that in mind, we spoke to a number of wealth managers operating in Europe, Asia, and the US about their digital priorities on the client and advisor side as part of our continued look at tech's influence. Below is a round up of comments from Olivier Capt, head of innovation at Pictet Wealth Management – the group has taken strides to expand in Asia, where digital is seeing some of its fastest uptake; Rod Sayegh, head of digital strategy at Fiduciary Trust Company International, owned by the Franklin Templeton Group, which has around $75 billion under management; and Rod Klapprodt of US wealthtech provider Vestmark, who joined as VP of products and is now its corporate strategy officer working with a host of advice firms in the US market.

Where have been the biggest changes they have seen?
A common thread for all of the firms was using technology to streamline administrative tasks so that advisors can focus on providing more value-added services to clients. Pictet’s Olivier Capt, as innovation lead at the Swiss bank, said that the most important factor for them is having “the capacity to deliver the banks’ knowledge and intellectual property to clients in an efficient, tailored and easy to understand manner.”

Most significant for Rod Klapprodt at Vestmark was how technology has shifted the advisor’s role from portfolio manager to "wealth management quarterback." Managers are much more focused now on client needs and "orchestrating a network of resources and expertise to improve client outcomes." Klapprodt said the shift has become particularly noticeable in portfolio construction: “There was a time when advisors, especially those at smaller firms, would build portfolios themselves or perhaps rely on a portfolio manager within their firm to completely manage the portfolio. Technology has completely changed this dynamic. Now, firms of any size can easily access a network of research providers, investment strategists, and third-party portfolio managers."

For Sayegh, head of digital strategy at Fiduciary Trust, the flood of digital services has created a two-speed adoption, with clients as rapid adopters and advisors trailing behind. “Advisor teams have always been about service, doing what the client is asking them to do and keeping detailed notes on their likes and dislikes. What most are failing to do is asking (not telling) the client how they want to work with their advisor, how they want to interact, receive information, meet, conduct transactions,” and highlighting all the ways of interacting that are available to them. He argues that advisors need to be as versed on digital offerings as they are on advising on asset allocation.

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