In the whitepaper published this week, Deloitte and Avaloq combine their expertise and explain why different models of digital wealth advisory match different group of investors. The first step for wealth managers, however, is to clearly define their digitisation strategy.

As digital solutions are disrupting the financial services industry, new models of digital wealth advisory are emerging. Financial investments are no longer limited to affluent investors, and new, tech-savvy customers enter the scene with different expectations than the traditional financial investor. In this new landscape, wealth managers would need to adapt their approach and embrace digital solutions to serve the full range of customers. This is the context for Deloitte and Avaloq’s joint whitepaper "Emerging models of digital wealth advisory".

Robo-advisory is not for all

The whitepaper describes some of the most common models for digital wealth advisory, and suggests that the target group, the customer’s investment philosophy, and expected service level are crucial components when defining the best advisory approach. While retail investors are sensitive to cost and looking for fully automated robo-advisory, mass fluent investors generally prefer to combine digital advisory with human interaction. High Net Worth Individuals, on the other hand, expect to have a personal relationship with their wealth manager and are less inclined to welcome digital models. The whitepaper highlights the importance for private banks and wealth managers to clearly define their strategy before they embark on their digital transformation.  

“More and more wealth managers are investing in new technology and improve their digital offering to match their customer’s expectations. What is important to bear in mind, however, is that a digital solution is as much about strategy that it is about technology. Without a clear strategy, the investment may not give the desired result,” explains Steve Hauman, Partner at Deloitte Luxembourg.

The whitepaper also illustrates the different options banks and wealth managers have when opting for robo-advisory, and explain the pros and cons of building the solution in-house, as opposed to working with established Fintechs or building on existing platforms.

“Technology enables multiple models of wealth advisory, and digital offerings play a crucial part when banks want to serve new markets. It is important to note, though, that a shift to technology-based solutions also requires a change in the company culture for a seamless client experience, ” comments Thibaut Jacquet-Lagrèze, Head of Group Marketing at Avaloq.

Matching tech and strategy

Avaloq, a leading fintech company providing banking software and Business Process as a service (BPaaS), and the global consulting firm Deloitte are combining their respective skillsets to share insights and guide banks and wealth managers in their ongoing transformation process. The whitepaper is the result of this work.