In our last article, we looked at robo-wealth management from a client’s perspective. We discussed the idea of incorporating a real time, technology-driven client/manager interaction to keep customers in the loop and give them more of what they want. We encouraged wealth managers of ultra high-net-worth (UHNW) individuals to learn from tech savvy robo-advisors and step into the technological future… but what’s in it for the wealth managers?

When you think about it, wealth managers already have a tricky job. And if they let their clients get excessively involved with every other investment decision under inspection, how can anyone expect them to consistently perform? By embracing robo-advisor technology, they could ease this strain and actually improve their client relationships. Not only that, but the data gathered by the robo-advisor would give them some very valuable insight into the mindset of their clients.

Let’s remember that robo-advisor technology is extremely flexible, so wealth managers can make it work for them. It can be introduced at many points of the process, from guidance through to behaviour insight. Whether wealth managers embrace all the technology on offer or just dip a toe in, is yet to be determined. But what is for certain is that the technological revolution is happening… so, wealth managers: you shouldn’t hesitate too long – it won’t wait for you.

UHNW ‘111’ helpline?

Could the robo-advisory model act as the ‘111’ helpline of the wealth management world? Those in the UK know ‘111’ as the self-service medical helpline. Our question is whether robo-advisor technology can answer clients’ questions on behalf of the wealth managers? The NHS uses this model to ease the demand on GPs and to filter out those who need further treatment. Surely, technology provided by robo-advisors could achieve the same thing?

Algorithmic intelligence could be used to screen the client strategy before it even reaches the wealth manager. By filtering out the ideas that don’t require any further attention, the wealth manager can then add true value to the ideas that make it past this vigorous algorithmic screening.

Having this as a first port of call for inquisitive clients gives wealth managers the opportunity to incorporate clients’ ideology into their portfolio. This would not only improve customer engagement, but also allow them to focus their skills where they are most needed, further increasing the value to their clients.

A word of warning: it is important that clients do not feel trapped within self-help services or call centres. To ensure this doesn’t become the norm, channels to bypass the robo-advisor must remain open for those queries that don’t quite fit the algorithmic system.


We all know regulations across financial services are tightening. Dealings must be kept efficient and fully recorded in case regulators start peering in. Robo-advisors can manage client documentation in a user-friendly format and lift some of the increasing regulatory load.

In fact, the benefit of this goes beyond just housekeeping, it can also act as a sort of insurance policy for wealth managers. The user platform can store all the original investment goals of their clients. This means that, if results don’t go in the client’s favour, they don’t have to just scurry away and plead ignorance. The wealth manager will have evidence for any future challenge to the execution of their client’s investment goals.

Through the looking glass… into the future?

Robo-advisor technology can store information about clients beyond just binary data. They can provide greater insight into clients’ behaviour allowing wealth managers to better direct their offerings and enhance relationships with their clients.

How many times did the client enquire as to the exit value of a portfolio online? What is the correlation of this to a market condition or social media events?” These are the types of questions robo-advisor technology can answer. By knowing the answers, wealth managers will understand if a customer has an aversion to risk and can therefore influence investments to preserve their wealth. The future wealth manager could consider all these factors beyond a signed engagement letter.

“Psychographic analysis” is being used by Cambridge Analytica for the Trump social media campaign. To sceptical individuals this is just a posh phrase for invasion of privacy. It used hyper-targeted social media messages based on tracking behaviours such as spending activity, Facebook likes and TV habits. This technology is targeting US non-voters by analysing their personal values to increase engagement.

The opportunity here is to manage investments based on behavioural big data and to make decisions for the client (in line with their wants and needs) without even talking to them.

Robo-advisor technology gives a wide range of benefits for wealth managers. There has been initial negativity, but this is being diluted by the potential added value. But, the question still remains… How can one afford to give a personalised, real-time communication presented in an accessible, digestible format for the client? And how can one do it while precariously juggling executions, processing and settlements in the background? The answer is simply – something must give.

We will explore this further in our next article and discuss the proposed ‘Holy Grail’ of the wealth management world… Outsourcing. But first, wealth managers must establish what differentiates them from the rest. What is it that you do that no one else can? Where do you add value to your product? Why do your clients choose you?

Once a company has a grasp on their differentiator, the answer may lie in outsourcing the non-differentiating processes. This would free up resources and capital, allowing the company to extend their competitive advantage and give them the opportunity invest in better technology and services.

Wealth managers must adapt to survive. Hesitate, and they will get left behind…