Wednesday, 12 October 2016

International Financial Advisers Must Embrace Change

The international financial advice market has changed dramatically over the past couple of years and will continue to do so with many companies adapting to these changes - Just Service at the forefront.
Old Mutual International sited in a White Paper “Adapting for the New World of Advice”, that 54% of financial advisers are deviating from upfront fees/commissions by their clients and moving towards a model that has a recurring fee system.

The paper declares there are shifting client expectations and that these changes, if navigated correctly, can lead to new opportunities for international advisers. While all international markets are not progressing at the same speeds, these markets are ultimately heading towards providing greater transparency and providing more value for clients. With contemporary advances in technology, advisers need to utilize the latest financial technology (Fintech) to provide clients with additional online services accompanied by a lower cost of advice.

Just Service HK has embraced this new environment. We allow expats with existing savings, investment and pension plans from companies such as Zurich, Generali, Old Mutual International & Friends Provident International to move their plans onto the Just Service platform free of charge. On the platform clients have access to the Just Service mobile app, client portal and market commentary with no additional cost.

Robo advice - Friend or Foe?Two-thirds of wealth relationship managers don’t consider robo-advisers a threat to their businesses, nor do they plan on implementing it anytime soon. They argue that clients don’t want digital functionality and would rather talk to an actual person.

Barry Benjamin, Global Asset and Wealth Management leader at PWC thinks otherwise.

“This conflict within wealth management firms, combined with a client-base that feels only weak affiliation to its chosen providers, is creating a sector that is now acutely vulnerable, to digital innovation from FinTech incomers, including robo-advice services,” says Benjamin.

Robo-advice, an emerging market in the financial advisory sector, is gaining increasing popularity. It involves providing automatically generated portfolios at typically lower costs than human advisers. A lot of financial advisory firms have already added, or are in the process of adding robo-advice as an alternative to traditional human financial advisers.

PWC acknowledges the influence of robo-advice and gives three areas of advice which wealth firms need to address in order to succeed in a changing market.

“Accelerate efforts to adopt a comprehensive digital infrastructure that integrates every aspect of their activities and corporate culture, from the back office to how they service clients and market to new prospects”

“Harness the potential of digital to realise greater efficiencies, manage costs and advance their core client proposition by drawing on a much wider range of available data”

“Be willing to partner strategically with FinTech innovators to deliver technological solutions at the speed the market expects”

“Firms that embrace and seize the digital opportunity now are in a powerful position to deliver propositions of real and sustainable future value which combine the very best of technological and human capital”,
Benjamin concludes.

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