Modern technology has enabled self-service wealth management where end-customers can investigate, learn and make decisions about their financial situation. This marks the beginning of the democratization of the industry, where seamless guidance through the intricacies of personal finances is available for those who would not previously have the privilege of using the services of a financial advisor.
However, combining technological advancements and the human-led service of a financial advisor in many cases leads to a better experience. This effect is achieved through empowering an expert with the tools that help them improve the quality and content of their work to levels previously unachievable. At Kidbrooke, we provide technology enabling financial advisors to build trust and truly future-proof their business models without losing the human connection. In this article, we describe two important elements of the customer experience that a hybrid model could add to any modern physical advisor’s arsenal: proactive notifications and an interactive simulation-driven toolkit enabling the expert to model and analyze various economic states and strategies on the fly. In our experience of many years in the industry, we believe that technology complements rather than replaces the human experts, helping them provide an outstanding service, reducing the time and costs spent on meeting preparations and admin, while making their workload easier.
OutRank®, our financial simulation engine, is a back-end B2B solution that enables all these features through its unique capabilities in financial planning. There are four core characteristics of the analytics solution enabling financial advisors to realize the full technological potential in their work to date:
Completeness: Consideration of the current state of the customers’ economy as well as their expected future situation. Achieving completeness involves a holistic consideration of all expected and planned financial events or milestones, such as buying a house, taking early retirement or purchasing a business. Completeness is usually achieved by careful construction of a cash flow model, which OutRank does not only simplify, but greatly improves by adding an evaluation of thousands of economic scenarios per second in the list of superpowers of your advisor teams. Besides, OutRank supports the modelling of taxes and fees, making your analyses even more reliable and accurate.
Realism: The financial markets are uncertain, and a good analytical toolkit should help your team of advisors evaluate this uncertainty correctly. A more in-depth analysis would not only focus on the average values but carefully consider worst- or best-case scenarios. Our economic scenario generator uses Monte Carlo simulation, with a more sophisticated framework than the classical Gaussian distribution assumptions, allowing your institution to gauge the uncertainty more reliably. What is more, our simulation engine allows for incorporation of your firm’s house views, which allows you to preserve your institutions’ brand and outlooks while enjoying superior analytical capabilities.
Speed: Technology needs to be able to learn and analyse data with sufficient speed to meet the modern requirements for interactivity. Otherwise, it cannot be used in customer meetings, leading to frustration and damaging the impression of your business. Even though OutRank’s modelling, and simulation features are far more sophisticated than those provided by standard solutions, it is fast enough to power fully interactive sessions serving up results in near real time. High quality analytical software supporting the hybrid channel should rank well in all these areas. Kidbrooke’s team has accumulated years of expertise in technology, mathematics and wealth management, which has helped us to ensure that OutRank offers complete, realistic and fast analytics underpinning your financial planning services. These features enable OutRank to power proactive notifications as well as to turn your meetings into interactive, informative, and highly pedagogical experiences.
Notifications
To our knowledge, one of the most important technical enablers for an advisor is the ability to automatically notify their customers about the important milestones or action points of their wealth journey. These intelligent notifications based on the ongoing automated analysis of their customers financial situations, lets financial planners spend more time on their core task of building relationships with clients rather than spending their time on exhausting excel-based calculations.
Here is a small example of how this process could work: OutRank is fed customer data to investigate the portfolio of a client and report information back about potential advice or suggestions for the customers. For instance, OutRank can evaluate whether the portfolio risk is in line with what the client would like to have, how updated house views impact the portfolio or whether a client should change the taxation form of an account. Unless technology is complete, realistic and fast, the cost of these evaluations could increase dramatically or, in a simplistic siloed case, the results of such evaluations could contradict one another.
OutRank’s notifications can be used in two different advisor-led workflows. First, advisors find relevant topics to engage the clients and utilise OutRank to create answers to their potential questions or inform them of the potential milestones. The first workflow could be fully automatic, going to the end-customers directly. For example, it could be a notification that the risk level of their pension savings no longer meets the agreed risk level with a suggestion to rebalance the portfolio or arrange a quick meeting with their advisor. The second could be tailormade for professional advisors who receive updated information about their clients. For instance, it could be a notification of a customer who goes off track with their financial goals, and therefore it makes sense for an advisor to take action and re-think their investment strategy together.
With help of these notifications, advisors can pro-actively learn about their customers and reach out promptly to discuss important topics about their financial health.
Achieving a Pedagogical Financial Experience
In our discussions with financial advisors and relationship managers in wealth management on what they consider successful customer meetings, we have found that three aspects matter. The first two are obvious: the relevance and quality of the financial advice. The third one is more subtle but is an area that could be greatly enhanced by intelligent technology. It involves holding engaging and fun meetings where the client can be fully involved in the process, to fully understand, co-create and feel listened to.
We found that it is important to visualise and sufficiently explain what might happen to customers’ finances in the future with help of technology. The user experience needs to be sharp, clean and focusing on the core aspects of the question(s) the customer might have. Crucially, the ability to fulfill the listed features – the completeness, realism, and speed – is necessary to create trust in the numbers.
“Yes, this looks good, but what about the tax effect be in the long run? This is relevant, but what if we have a new financial crisis?” With a tool like OutRank you can instantly show the effects of these changes over the next three months to thirty years.
Essentially, since OutRank is computationally fast, it is possible to hold an interactive meeting answering questions from a client on-the-fly. OutRank can help your advisors investigate new types of investments or examine complex what-if-scenarios of market development, receiving the response in seconds. Complementing human dialogue with super-human simulation tools leads to a space where anxieties can be addressed, curiosity satisfied, and the future of loved ones secured easily and interactively.
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