High net worth individuals (HNWIs) value hybrid advice models, which combine digital tools with some level of human interaction, as much as wealth manager-led offerings, according to a Capgemini report.

The 21st edition of the 2017 World Wealth Report (WWR) released by Capgemini noted that the entry of big tech firms such as Google and Alibaba in to the wealth management industry will re-shape the course of the industry as more than half (56.2%) of HNWIs are now open to using service of these tech giants for managing their wealth.

According to the report, respondents perceived BigTechs as offering increased efficiency, transparency, online excellence and innovation.

The report noted that that affluent people are most likely to switch to hybrid advice once a wealth-management relationship is well established. However, at the early stages, when financial goals are being outlined and risk tolerances set, nearly 60% of the respondents preferred to work directly with a wealth manager.

The preference to interact with wealth managers however fell to 37.5% by the time the relationship matures to reporting on performance and making adjustments.

Capgemini head of global banking and capital markets Anirban Bose said: “With global wealth at record highs, the 2017 World Wealth Report findings are especially critical for wealth managers moving towards delivery of hybrid advice. Firms can jumpstart their hybrid journey by focusing on transformation related to people, processes, and propositions.”

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The report added that advisory model, talent sourcing, client segmentation, data and analytics, personalization of the client journey and fee structures, program execution, culture, and marketing are the specific areas that call for strategic transformation.

HNWIs in Europe and Asia-Pacific (excluding Japan) were found to be most inclined to embrace hybrid services, while those in North America were found least interested.

The report noted that wave of hybrid advice is here to stay as HNWIs below 40 years of age preferred a hybrid approach for all five lifecycle stages, especially for the “develop wealth strategy” (60.8%) and “manage ongoing advice and optimization” (60.0%) phases.

The report suggested that even as the industry moves towards hybrid advice, wealth managers must keep abreast of ongoing technological developments in the field of voice interaction and artificial intelligence as they have the ability to dramatically alter the playing field in wealth management industry.