Through September 10-11th, Kidbrooke Advisory attended the Robo Investing 2019 Event in London. Existing for over 2 years, the event has become an excellent platform for knowledge sharing and communication between numerous FinTechs, banks, consultancies and other players of the emerging industry, all across the world.
Today we are summarising the core trends and themes discussed at the event. The main topics led the overall direction of the robo-advice offerings as well as tips and tricks on achieving more customer engagement.
- The trend of re-bundling comes back after an era of innovation powered by unbundling existing services. Within the context of robo advisors, it means that the industry is likely to shift to more holistic offerings that would analyse the entire balance sheets of the consumers. For instance, the “holistic” financial advice is expected to include mortgage and liability planning, pension planning, investment management and costs and income planning.
- Automated financial advisors gradually turn into a crowded space with similar offerings, and, likely, only those who manage to differentiate themselves and tap into the right demands would thrive. Moreover, one of the red threads of the discussions concerned the business value of robo-advisers in comparison to direct ETF investing. Many delegates cited the convenience and simplicity of the experience as the main advantages of robo advisors.
- Millennials remain to be a target group for many of the B2C robo advisors. Presented research indicated that they are currently more inclined to invest in experiences rather than in objects. Hence, there is a momentum to developing niche solutions such as eBay wealth management (investments in curiosities) or values-based investments (such as religion or relationship with environment). At the same time, the concept of categorising the customers by age was a subject of criticism in favour of life situations approach.
- Sustainability (Environmental, Social, Governance) remains to be one of the core topics that robo advisors aim to tap into, but the understanding of these practices is different. Some of the robo advisors provide an opportunity for their customers to create portfolios with sustainable assets, while others concentrate on building banking services for the underserved population in remote areas of the world.
- Building and maintaining engagement of customers with automated financial planning providers remain to be one of the core challenges of the sector. Many retail providers suggest the development of a smart interactive UX as a core strategy of keeping up the customers’ interactions with a service. In contrast, more exclusive, HNWI oriented wealth managers campaign for the benefits of hybrid offerings.
- Customer trust is a crucial competence, which the robo advisors strive to grow and nurture. However, since this concept has many dimensions to it, there are different approaches to building trust that the automated financial advice providers pursue. Most of the providers concentrate on either enhancing user experience or using advanced technology or leveraging transparency.
Overall, the conference was a valuable forum for sharing experience and exchanging insights between various players of the wealth management sector. However, in our view, more attention could be devoted to discussing regulatory pressure within the industry as well as innovation within the methods of providing advice. After all, meaningful digitalisation implies transforming the entire business model to a more mature, developed state that could solve the overarching challenges of the industry. We strongly believe that within the area of digitalising financial advice, the efforts have to go beyond the user-friendliness of UX and improve the core of the service.