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  1. Analysis
March 11, 2020

Power to the people – thanks to the tech

By Alison Ebbage

Is the hybrid robo model handing power back to advisers and clients alike? Or is it destroying the personal relationships and human touch for which private banking is regarded? Alison Ebbage finds out

The impetus to reduce cost while also better servicing clients is perpetual. Technology in its various forms seems to be an integral part of any solution. But in particular being able to harness the best parts of the robo advice model and use that alongside the adviser in a hybrid way can provide a tangible service enhancement, allow the adviser to make better use of time and still retain and enhance the personal touch.

A survey in by Appway and the Scorpio Partnership in summer 2019, Innovate to Succeed: The Client Call to Action for Wealth Management, reflected this.  It spoke to over 270 investors from the United States, the UK, Germany, and India to find out how wealth managers can create more value for them by leveraging technology.

Nearly four out of five, 78%, thought that their own wealth management advisers should find new ways to deliver value to them in future; 54% thought that advisers would need to be augmented by improved technology and digital tools. The survey also showed that time with a human adviser is still important.

“The trend is towards more self-service capabilities and more communication through digital channels, yet not at the expense of dedicated access to a human adviser which remains a priority,” the survey said.

Enter the hybrid robo advice model where the robo assists and provides automation to enhance what the adviser can offer, as opposed to replacing the adviser entirely. This model is in nascent stages but has the potential to deliver on lower costs and better service and efficiency for the adviser while retaining the high touch client experience in the wealth management community where the personal touch will always be key.

Thomas Schornstein, head of Europe & Middle East at additive, comments: “Our idea is that this should be not talked about in terms of it being a robo adviser but rather in terms of it being a digital channel that can make the client’s life easier and help the adviser to better service the client.”

“Cost to income rations cannot afford to have a very human intense service in the lower wealth segments and so digitisation and self service is imperative. The biggest opportunity is within the mass affluent market where the investment side can be grown from just payments and then the relationship widens and deepens,” he says.

This is amply demonstrated by the launch last year of Rosecu. Founded by Qiaojia Li who co-headed Coutts’ Asia desk up to last September, the platform aims to attract ‘middle market’ investors with assets from £100,000 ($129,591) to £2m by offering some of the services of a private bank through the use of AI. Its service is intended to replicate bespoke adviser sessions in private banks.

However, higher up the value chain, the story is slightly different with the robo adviser being seen as a positive service enhancement, a differentiator, rather than a means to save money.

John McCann, chief revenue officer at Nucoro, comments: “In Switzerland there is great interest in this as a tool to hone the offering to the very investment-savvy high net worth community. It is seen as an additional service proposition for those that would like to experiment and benefit from this approach. It is seen as a white glove service where the only the elite get to do this.”

Indeed, bigger banks see this as a diversification play and will invest and deliver this as part of their digital offering – especially as a more tech-savvy generation of HNW come online – and indeed as current clients have higher every day expectations and therefore expect more from their professional services providers, including wealth managers.


The onboarding and information gathering process is seen by most as the initial area for a robo to best be put to work.

Guy Healey, head of private banking at Brown Shipley, comments: “The context around the regulatory environment is so important because the focus on suitability for an individual means that templating is no longer doable. It’s too easy to underestimate the cost and effort of gathering all the information required and also the cost of getting it wrong.”

The robo can also help with the time it takes to gather the information to determine suitability, help the adviser to fact find and, therefore, arrive at advice that is tailored to that individual. This serves to save both the client and the adviser time by using a digital tool rather than spending hours form filling only for that to then be entered manually. It also means that the process can be carried out at a time of the client’s choosing.

Healey says: “Uptake is good because it is essentially something that is making life so much easier for both the adviser and the client. The regulation is arduous and intense but it does address the sins of the past- anything that can now make that whole process of gathering core information easier is to be welcomed. Obviously more complex information that beneficial owners, trust structures and the like are less suited to being captured by a robo and will continue to need manual input.”

But if acquiring the client is one thing, then keeping them is another so how can the robo be usefully applied on an ongoing basis?

Encouraging the client to play around with the digital tools and take an active role in the portfolio is one way.

Schornstein explains: “The client should be supported to see the benefit of being able to access and amend a portfolio online in order to optimise the portfolio rather than having paper based reports and recommendations. Another next step is allowing the client to play around and set how he or she wants to see reviews, monitoring and reporting so that he can see how it relates to other things and how the risk is panning out overall and from specific angles. This works, say, during evening hours when the adviser is not available – that might raise a few questions for the relationship manager the next day.”

Lifecycle planning

The same principles of letting the client play around, supported by the adviser can also be readily used within the lifecycle planning. This is really useful when it comes to presenting things very visually and adding in or taking away various scenarios such as charitable giving or leaving money to relatives. Being able to easily understand this sort of thing and then being able to discuss with an adviser creates and develop trust.

Healey comments: “Clients and advisers alike love this as it is so visual and easy to understand – key when it comes to managing something as important as to whether they have enough money to last over their lifetime.”


And while suitability regulation prevents the elimination of human oversight within the investment process, the robo certainly has role to play here.

The Appway survey found that “human accountability for investment decisions remains sacred for 86% of investors, our research indicates growing acceptance for the use of Artificial Intelligence. For instance, 35% see added value in AI profiling their investment needs, and 43% believe that AI could support their firm’s customer service.”

Healey points to the role of the adviser in making sure that the client understands fully the risks with whatever is being recommended.

“Retaining the relationship is key to that. The adviser needs to be able to articulate the complexity of an investment- especially as you move up the wealth ladder and get into alternatives and less liquid investments. The advisers should intuitively know whether the client has understood the risk – that is something that needs doling face to face,” he says.

But the scope of the robo when it comes to choosing investments could be limited in terms of clients wanting more esoteric investments, particularly those that are illiquid or hard to quantify such as impact investments or fine wine.  This points to the robo being able to do the legwork but the client and adviser then sitting down to discuss.

Schornstein points out the need to support self-service: “The wealth manager needs to make sure the client is happy with the self-service elements and there needs to be good support to help them to use it, perhaps initially alongside the adviser.”

Kate Tsoura, CMO, Profile Software, comments: “The scope of the robo depends on the individual firm- what investment types and classes should be included. What level of functionality should be afforded to the individual? There is a huge gap between the possible and the desirable at this point in time.”


Indeed this last point is especially important in determining the future of the robo advice model. Just because something is possible does not follow it should be done automatically!

Healey comments: “In the end you have to be true to your brand values and within wealth management the brand value is all around the personal service and the advice that comes from that relationship.  Clients want to be able to use tools and be self-directed when they choose but they also want the option and the availability of a relationship and to trust in the advice they are getting.”

Indeed, specialist advice at critical life moments never going to be less in demand and is often why HNWIs choose to initiate a relationship with wealth management firms in the first place. Having the robo in place to take care of the day to day means more time to deal with the complex.

Schornstein comments: “Once the client gets used to the robo conceptually and is comfortable with it then there is less reliance on the manager and that frees up the manager to do the complex stuff like simulation, risk management, financial planning etc. In particular a liquidity event or a significant life change such as the move from accumulation to decumulation, would certainly need adviser input and could never really be managed by a robo. This sort of personalisation really does need the human touch.”

Another salient point is that clients will always demand more for less money and so the digital robo provides a means to both enhance the service via the complicated things that need adviser input as well as save money on the things can be more automated or digitised. It’s a way of a better experience and thus engaging a client and subsequent generations.

As tools get better it is easier to see how firms can experiment with this.  But a lot depends on how keen firms are to invest in technology and digitisation. Happily there has been significant cultural progression on this and now, for example it is considered a given to have mobile access to a bank account.  The same will soon apply to the functions that a robo can provide.  This not entirely age dependent either but more reflective of everyday life and the services provides by the likes of Netflix and Apple now being demanded as standard. Older people are as likely to want this as standard as younger people.

Indeed, client expectations around personalisation for example, point to better data analytics in order to lead to more specialist advice and face time, and therefore more contact time with the adviser.  The Appway survey revealed that older generations were aware of the need to access data to get to the personalisation.

“The majority of investors over the age of 67 want to receive ongoing data analytics and content that is personalised to their interests and goals. 80% believe that data analytics should be at the core of a better customer experience,” it said.

McCann concludes: “This is a digital opportunity and a good thing.  It is about taking the relationship to the next level. The devil is in the detail; of deciding what the right level of human interaction is and meeting the digital desires of the next generation. For now it is all around baby steps where what is possible, desirable and workable is worked out.”

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