Preparing for Change - how will consumers want to interact tomorrow?
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The document discusses significant disruptions in the wealth management industry due to emerging technologies and changing consumer expectations, emphasizing the need for firms to evolve strategically. It highlights trends such as the shift to online services, the demand for integrated digital financial tools, and the mixed reactions to robo-advice among financial advisors. Additionally, it outlines the importance of creating a technology roadmap to enhance client experiences and streamline operations in an increasingly competitive market.
Preparing for Change - how will consumers want to interact tomorrow?
- 1. iress.com Preparing for change Chris Pitt Head of Market Analysis 26th May 2016
- 2. Technology disruptors ? So, what should I do? Consumer segmentation Agenda
- 3. There is significant disruption within the Wealth Management industry. New ways of delivering advice continue to emerge, and competitive positions will erode while others will strengthen, creating winners and losers across the industry. Wealth Management firms must strategically evolve to adapt to these critical shifting dynamics. Shifting dynamics Source: Deloitte
- 4. Impact on other industries * Source: IMRG Capgemini eRetail Sales Index 24% of retail sales now take place online* £114bn UK ecommerce sales
- 5. Disruptors?
- 6. But… Let’s not forget existing capabilities • RPQ • Lifetime cash-flow analysis • Product sourcing • Suitability reports • New business & trading • And more… • Video conferencing (Skype) • Client portal • Secure document exchange • Consumer driven calculators • Online fact-find • And more… Streamlining the process More efficient delivery
- 7. Data aggregation What FinTech innovation would people most like to see in the future? IRESS Data, Disruption and the Digital Consumer report (iress.com). The ability to view their financial world - bank accounts, mortgages, investments, insurance - in one place. 23%
- 8. Pensions dashboard 47% not confident how much their pension is worth. Source: Which? “The concept is so compelling that it is already an established part of the pensions industry in other countries. Savers in Denmark, Sweden and the Netherlands all have access to a dashboard of some sort.” Darren Philp, The Peoples’ Pension
- 9. Digital passports & data vaults A third of people would save or invest more if it was easier to transfer money and open saving or investment products. Source: TISA • Barclays • CitizenSafe • Digidentity • Experian • Post Office • Royal Mail • SecureIdentity • Verizon Certified companies • Your online assured identity • Already an option for accessing UK Gov’t services
- 10. Digital advice Life Co’s and asset managers making major investments. ABERDEEEN ASSET MANAGEMENT Acquire Parmenion BLACKROCK Acquire FutureAdviser INVESCO Acquire Jemstep SCHRODERS Takes stake in Nutmeg LV= Takes stake in Wealth Wizards FIDELITY Fidelity acquire eMoney Advisor
- 11. Digital advice In a recent webinar, IRESS asked advisers what they thought about robo-advice: 65% 9% 23% Opportunity Threat Undecided 2016: A Robo Advice Odyssey available on YouTube
- 12. Digital advice What is ‘Robo-Advice’? Stuff & Nonsense! Real challenges Who cares? Many will try - many will fail Application technology to ‘self-led’ advice Consumer engagement Client acquisition Consistency across channels Compliance Proposition
- 14. Dispelling the age myth IRESS Data, Disruption and Digital Consumer report • Little difference in tech usage between age groups • Biggest difference between income groups • The higher the income, the more likely to access current affairs information daily online
- 15. Who will use robo? Source: CFA Institute (Fintech Survey April 2016)* Ultra High Earners 21% Institutional Investors 24% High Net Worth 41% 100 80 20 40 60 Other Investors 67% Investors positively affected by automated advice tools* Mass Affluent 70%
- 16. Who will use robo? Market Fraud 37% Quality of Service 37% Product Choice 55% 100 80 20 40 60 Access to Advice 62% Consumers positively affected by automated advice tools* Costs 89% Source: CFA Institute (Fintech Survey April 2016)*
- 17. Segmentation Categories Dimensions Primary channel preference Price sensitivity Financial literacy Life stage / Life events Peer-group & influencers F2F Phone Online Lo Hi Lo Hi 1st job 1st child 1st property Retirement Friends & family Colleagues Social media
- 18. ? So, what should I do? Agenda
- 19. Creating a technology roadmap • It’s not going away! • Segment and design accordingly • Expect an omni-channel world • Become the point of client data aggregation • Encourage client access
- 20. Creating a technology roadmap Adapt your proposition suite Automated advice (robo advice), omni-channel 3 Transform your operations Workflow, process reengineering, online portals, lower cost servicing, automating compliance 2 Improve your client experience Consistent, seamless experience; visually stunning, easy access to their provider 1 Underpinned by a digitised omni-channel platform
- 21. Thank you Email: chris.pitt@iress.co.uk Mobile: 07920 135708 Chris Pitt Head of Market Analysis LinkedIn: Christopher Pitt Twitter: @chrispitt11
Editor's Notes
- #20: http://www.ft.com/cms/s/0/f5888abc-c741-11e4-8e1f-00144feab7de.html#axzz3xsWxaSnn