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Hybrid advice technology

Exploring methods and tools firms can use to develop a hybrid advice process

The previous blog in this series gave an overview of hybrid advice and the trends in the market. As a reminder, hybrid advice combines components of traditional human-based financial advice and self-service digital advice, offering a flexible and tailored wealth management solution to clients. Wealth management firms operating platforms and advice businesses are seeking ways to broaden access to advice and offer flexible client advice journeys that can generate efficiencies, improve customer experience, and grow revenue while maintaining the human touch.

This blog explores the methods and tools firms can use to develop a hybrid advice process. We outline three approaches firms could take and discuss the opportunities and risks associated with each:

1. Buying a “best of breed” or standalone hybrid advice tool.

There are a number of exciting new entrants into the hybrid- advice sphere, offering intuitive customer-led journeys, fact-finds and product recommendations, which can really accelerate the delivery of a digitised journey.

These tools are not a “silver bullet” for a full advice proposition – they will improve client engagement in the first few steps of an advised journey but stop short of the less glamorous back office tasks such as researching ceding schemes. Pre-built journeys which come with these tools often only offer a small subset of advised propositions. To get the greatest benefit, hybrid tools will need to be integrated into a firms existing technology ecosystem, to ensure that lead and client management, market research, cashflow modelling, payments and accounting are all linked to the data gathered during the advice journey.

The risk to be avoided is of the hybrid tool becoming just one more application bolted on to inefficient manual back-office processes, delivering increased cost and failing to make it easier for advisers to offer services to more clients.

2. Extend the existing advice technology incumbents.

Traditional “Adviser Back Office” providers like Intelliflo and Iress are continuing to invest in digital advice processes on top of the traditional advice capabilities they already provide.

By outsourcing development of advice technology, firms can avoid the distraction of designing and integrating enhancements like digital journeys, allowing advisers to differentiate based on their customer service, fees and propositions.

This approach also allows for greater speed to market but risks a reliance on key suppliers to develop the digital services that a firm is seeking, and that when they emerge, it may become harder to differentiate from competitors who have access to the same functionality.

3. Building a new top-to-bottom proposition to support hybrid advice.

To do this, a firm needs to select the tool to build the digital and back-office journeys.

Salesforce and Microsoft Dynamics have started to include advice journey templates, which can appeal to larger firms with the resource to configure a comprehensive digital advice experience on top of the CRM. These journeys can be developed using the CRM's own digital extensions (such as Salesforce Experience cloud or Microsoft's Power Apps).

Alternatively, low-code tools (e.g. Outsystems) or process automation tools (e.g. ServiceNow) can be used to accelerate a bespoke-built advice process and integrated into a firm’s existing advice software.

As well as developing a truly differentiated digital journey, this approach can enable firms to re-design their end-to-end processes and gain efficiencies across the board.

But the development of all front and back-office advice processes is time-consuming, expensive and should be assessed over a multi-year delivery timescale.

In short, as shown in the below figure, there are a breadth of technologies with different strengths to help firms develop a hybrid process and regardless of the approach taken, one thing is clear: a personalised advised experience including both face-to-face and self-service elements, requires a flexible, integrated ecosystem of technologies, using carefully selected hybrid advice tooling.

The approach, model and integration of the “best of breed tools” is critical. Recent developments in this area include the partnership between SS&C and Intelliflo to create ‘Wealthlink’, allowing advisers to manage client investment and pension plans in one place, a UK-first which has the potential for being a real step forward in using technology to allow advisers and paraplanners to do the right thing for their customers, quicker.

The firms which are taking the greatest strides in hybrid advice - building new customer bases as well as retaining their existing clients - are doing so with a strategy of identifying the best blend of technology services for their business and taking ownership for assembling and integrating those services.

Future blogs in this series will explore topics including regulatory considerations when building a hybrid advice journey.