Wealth managers and advisers need to update their systems and embrace technology rather than fearing robo-advice models will steal their business, said a panel of experts.
Speaking on a panel at the Wealth Management Association summit yesterday, Investec Wealth and Investment chief executive Jonathan Wragg said that advice will become a “hybrid model” where technology and face-to-face relationships will interact in different ways.
He says: “Technology should be shaped into the business model of the firm. The world is a much more complex place now and there is a much more need for advice.
“We are close to the ticking point where the majority of the population is digital native and the way they’ll interact with financial services will be different to that of our current clients.
“In 30 years though we will need both digital and personal touch so advice will be a hybrid model.”
Brewin Dolphin head of wealth and investment management Stephen Ford, also speaking on the panel, said customers’ needs are changing because of technology but agrees that advice will continue to play a key role.
He says: “The top thing for firms is to look at their customers and what they want. In the industry we still have got a lot to do.
“Technology is a pure enabler. Our clients demand more real live access and more power to manage their money but there is still a role for the person to advise.”
Fellow panelist JP Morgan international private bank managing director Tracey Reddings also acknowledges the challenges posed by digital disruption, especially in the high-net-worth space.
She says: “Over 80 per cent of people still need advice but they want access to digital information and data and that is a challenge for us as wealth managers. Technology gives us this power but it does not replace advice, they are complementary.”
However, technology doesn’t just mean having “a fancy website”, says Nutmeg chief executive and director Nick Hungerford, but instead means building the right infrastructure to sustain scale.
He says: “What we have learned is that this industry doesn’t just rely on face-to-face advice, you need infrastructure to cope with the scale and volume of clients that we have.”