Speaking to International Adviser, two vice-presidents of Sapient, Josh Sutton and Jarlath Forde, talked about the importance of advisory firms leveraging digital technologies, particularly as a means to improve the adviser-investor relationship.
“It’s really about how advisers can be better informed about what their investors are doing and looking at,” said Sutton. “It’s also about enabling firms to create greater scale, which can be done by helping advisers be much more effective in their interactions with people.”
Push-back
Despite the benefits of using digital platforms, Sutton said some advisers feel like the ‘robo-adviser’ concept is there to disintermediate them.
“There’s a certain degree of push-back from some people,” he said. “But I do think it’s becoming progressively more accepted across both the adviser community and the asset manager community.
“The millennial generation represents a very large segment of the entrepreneurs in the world"
“People are also recognising that at its core financial advice is still a business where people want somebody they can look at as a person and trust.”
Forde said the role of the adviser will change as digital tools give firms more opportunity to serve clients in the mass affluent space, increasing the number of clients they’re building relationships with and servicing. He also said there needs to be more focus on attracting younger clients who are likely to inherit or make money later on in their lives.
Challenges
However, Forde said one of the challenges for companies is to draw in new younger clients. This, he said, is either because advisers are not using the digital channels, or because they are not incentivised or rewarded by their firms for taking on clients with smaller pots of wealth.
Sutton highlighted how critical it is for advisers to focus on clients in the entrepreneurial space: “While the high-net-worth is still a small segment of the millennial generation, the millennial generation represents a very large segment of the entrepreneurs in the world.
“I think it’s important to have clients tied to particular digital communities to make the advice feel relevant to them specifically,” he said. “There are many client micro segments which advisers can look at to provide targeted advice. This allows them to start building relationships with that demographic.”
New foray
Asset managers are also adopting digital frameworks to help engage with advisers. Sutton said: “We’re going to start seeing a lot of changes in terms of the fund companies and how they use digital to support the advisers and be competitive in the market as well.
“With a lot of the asset managers, it’s a new foray for them to provide digital tools to their advisers, so it’s not something they’ve done well in the past. They’re learning as they go.”
Sapient Global Markets offers business and technology solutions to the financial services industry.
