When Grace Jones bashed Russell Harty over the head all those years ago, it was because she believed she was not getting the attention she thought she deserved.
The same cannot be said of the algorithm-driven robo/digital/automated advice sector, which gets more than its fair share of column inches.
With all that coverage it can be hard to see the wood for the trees, so what’s the truth behind the hype?
Let’s start with the state of the nation: Numerous D2C digital wealth services have come to market in the past few years – and a few have already quietly disappeared.
A number of the ‘disruptors’ who thought they could challenge the incumbents head on with their lower-cost models have found the reality rather more difficult, and are increasingly pivoting their model to B2B(2C) in search of deep-pocketed partners.
There are some great examples of customer-friendly and engaging experiences, while others still leave much to be desired.
Artificial Intelligence (AI) is now touted as underpinning many services, yet few truly deliver on this. The long-promised digital propositions from the incumbents are now arriving – NatWest and Santander are in the market and HSBC and others are on their way.
And whether you are pro or anti-robo, a believer or a non-believer, the speed of digital change is increasing and new models continue to evolve.
The team at Altus is currently tracking well over 100 different tech vendors and digital services operating along the UK digital wealth value chain, and we are regularly asked to find out what’s really going on inside these organisations – what’s really under the bonnet.
Not surprisingly, several are merely a re-hash of what we have seen many times before: digitising elements of traditional, linear investment journeys. While often very worthy, this approach is not going to provide the breakthrough needed to convince the many millions of non-savers and non-investors to change their personal finance behaviours.
In need of advice
What is frequently missing is the advice offering that many consumers in the UK – right across the wealth spectrum – so desperately need.
However, a few brave souls are taking a more refreshing look at the problem the industry is trying to solve and designing journeys where the customer is at the heart of a fiduciary advice solution, not just the end of a product sale journey.
They are capturing a client’s complete personal and financial position digitally via multiple real-time data feeds, where it is not open banking, it’s ‘open everything’.
In these models, advice is lauded, not derided and a client’s specific situation – short, medium and longer-term – is analysed and a personalised, bespoke solution is recommended that considers priorities, ‘must haves’, wants, needs, dreams and yes, even optimises their tax position.
Ignore the barriers
There are propositions where a product sale is not required to create a sustainable business model and compliance, audit and risk help solve the problem, not act as ‘you can’t do that!’ barriers. They also seamlessly integrate the wide range of technologies and digital solutions now available, or coming very soon, to create a truly smart-connected world for consumers and advisers alike.
So if you’re currently developing a new proposition, or re-vamping an existing one, it would be worth stopping for a moment and asking yourself:
• Am I creating something new that will be relevant in three or five years’ time, or am I merely digitising the ‘old world’ and old processes?
• Am I creating something truly differentiated that consumers and advisers will want, or am I jumping on the existing, ‘comfortable’ bandwagon?
• Am I collaborating and working with nimble, best in class fintechs and other experts, or am I working for an organisation that still thinks it can build everything in-house more quickly, cheaper and better than anyone else?
• Am I prepared to challenge, push back and even p**s off some of the leadership team with the extent of my ambition?
• Am I stretching myself and my team? Am I really pushing hard enough?
• Am I, in fact, working for a future winner, or one that’s going to die a slow and very painful death?
Dependent on your honest self-appraisal, you may want to stop what you’re doing and challenge yourself to think a little harder and dig a little deeper. It should be hurting; you should be feeling a little bit uncomfortable and a little bit out of your depth.
That said, don’t believe the digital hype and hysteria and become a slave to the algorithm. The key to success will be the extent to which firms manage to optimise the role of people and machines.
Understand that with a sprinkling of healthy disregard for the status quo, your business and your future self will be eternally grateful.