Better client outcomes with human advice – let’s stop calling it “hybrid”
Robo, hybrid, and digital are three popular buzzwords that have begun to confuse conversations about how to engage and offer advice to clients.
For clarity, if it’s done solely via computer, it’s digital. If a human interacts with a client, it’s human.
Maybe advisers would do better by thinking of their service, or range of service offerings as: high-touch, mid-touch, or low-touch?
Whatever the naming convention, one thing’s clear: we need to stop confusing things by classifying “hybrid” as a different proposition.
As Boring Money chief, Holly Mackay says: “Digital or hybrid advice is the only way […] providers will find continued growth. And that consumers will find help. Full stop.” She goes on to say, “The tech is largely irrelevant as always. It’s a service to satisfy a more basic human need, supporting people in a low-level state of anxiety who need help and support with something fundamental to their lives.”
Digital and hybrid united
Some view digital and hybrid advice as two distinct propositions. This is not a view we agree with.
Nor should digital advice be seen as a threat to human advisers.
In fact, digital advice should intertwine with human advice and enhance your service offering. For example, the client-side app from AdviceBridge empowers clients by giving them greater engagement with their financial plan and enabling them to run scenarios themselves digitally.
By providing a single figure showing what users can afford to spend on a monthly basis now and in retirement, the simple and meaningful interface helps clients understand how their spending decisions can influence the money they have available now and in the future. In turn, this can help increase awareness of how small changes can create big differences.
Advantages of supporting technology enhancements
Talking about digital and human advice sitting happily together is all well and good, but this can detract from the benefits and opportunities available to those advisers willing to embrace and support technology changes.
Robo “advice” is questionable but, done well, may have a place
The level of “advice” that can truly be provided by answering several questions through an online questionnaire makes any “recommendations” provided somewhat questionable as a viable investment solution.
But this doesn’t mean it isn’t possible for some customers.
Although we may not wish to admit it, technology is at a place where full holistic, whole-of-market advice can be provided by technology. And it’s not only for those with small pots and simple needs.
For clients focused on a single goal, such as investing in an ISA, an execution-only “robo” approach may prove perfectly adequate.
Problem is, customers choosing this route probably aren’t aware of other options or how they should structure their holdings (across cash, ISA, GIA, pensions and so on). This means they’re almost certain to miss a trick – advice firms are not offering such solutions through technology.
If you need further convincing, research from Vanguard, showed that 88% of robo-advised clients were willing or extremely willing to work with a human adviser at some point in the future.
Source: Vanguard and Escalent
Tallying the price of low-cost advice
Many may say that given the costs of running a financial advice firm, it’s difficult to see how traditional advisers can cut their fees to a level that would be acceptable to the 6 million people seeking low-cost advice.
However, while some people are resistant to paying for advice, young people are more likely to pay for it in the future.
According to research from OpenMoney, 12% of those who have not paid for advice in the last two years say they are likely to do so at some point. This figure increases significantly in younger people: 21% of people aged 18 to 24 say they would expect to pay for advice in the future.
Re-set current thinking to prevent being hamstrung
Many advice firms could do with some blue-sky thinking around how they can better use technology to serve more people with diverse needs and stop being hamstrung by current processes and procedures.
The tech exists – it’s just a matter of knowing where to look.
Implementing the right solution and deploying it to best effect will enable firms to harness lead generation and offer wider advice solutions to more clients.
Seeing technology as an enabler to work across multiple client types, without these differentiated buzzwords, will allow firms to see the opportunities that lie in adopting a seamless, flowing solution.
Get in touch
To find out how AdviceBridge can benefit your business and your clients, please get in touch.