Overcoming the Last Mile Challenges in Wealth through Digital Advisory – An AGDelta Launch Event (Hong Kong)
On 22nd of June, AGDelta welcomed over 25 senior executives from 18 different wealth management organizations to The Ritz-Carlton Hong Kong to celebrate the launch of the newest version of the Digital Advisory Platform. AGDelta’s CEO Andrew Au kicked off the celebration by inviting Benedicte Nolens, Head of Risk & Strategy at the SFC and discuss where she has seen practical impact WealthTech has on wealth management.
It should be about the service, not the selling process
The fact is that there certainly is no shortage of Fintech initiatives happening in Hong Kong from blockchain to robo-advisory to chatbot. But ultimately for any WealthTech to be successful, it must be able to strike a balance between fulfilling their regulatory obligations and maintaining a positive client experience. On that front, the SFC has been actively engaging the industry, launching consultations regarding online distribution and digital advisory and have asked active industry participants like AGDelta to submit a response.
The threat of wealth managers losing clients because they failed to leverage WealthTech to enhance their service is very real. Wealth managers outside Hong Kong have begun experimenting and putting into production digital tools that enhance the client experience from onboarding to suitability, to client servicing. WealthTech should be embraced and the SFC is fully supportive of any wealth managers that take that direction.
Last mile challenges exist across the product supply chain
If we are to map the journey an investment product takes to become part of a client’s portfolio, from the product providers to the gatekeepers to the advisors to the relationship managers, we will quickly see that the last mile challenges exist across the entire supply chain.
For product issuers like Filip Vandenven, Executive Director of Antarctica Asset Management and an advocate of digital innovation in wealth, the ability to deliver up-to-date product information and documentation so his clients can perform proper due-diligent is a key driver in his decision to partner with AGDelta to release an innovative platform that can simplify and structure his product information delivery. Digital Advisory technologies offer value to his buy-side clients by helping them quickly understand the product’s characteristic, risk profile, and performance and shorten the product onboarding review process. Wealthtech that gives advisors the ability to structure a customized portfolio for each client is what differentiates the bank in a client’s mind because the service has become truly personalized.
Gaining valuable insight across the engagement
For product gatekeepers and relationship managers, their last mile challenges revolve around meeting the three acid tests for any product or investment advice:
- Appropriateness. Is the product appropriate to the client? Should a wealth manager introduce a USD denominated product to a Chinese entrepreneur that resides in Hong Kong and carries a Canadian passport but owns a US registered business?
- Suitability. Are the investment advice and the product recommendation suitable for the client? Besides checking on risks ratings, the wealth manager must consider the client’s portfolio concentration in a multidimensional fashion.
- Relevances. Is the advice relevant? Does the relationship manager know the client well enough to understand his preference in market or industry? Attuned to the client’s investment behavior and decision-making process?
A digital platform that smartly applies analytics and algorithms to reveal these hidden patterns can create a unique insight that will ultimately become the firm’s competitive advantage.
Analytics that drives call to action
Today, banks are applying big data and analytics in hopes of better understanding their client’s need but very few have succeeded in applying those technologies in real-life terms that can make a positive an impact on the client’s investment.
Andrew demonstrated how the new version of AGDelta’s Digital Advisory platform applies analytics that can drive call to action. The new version gives investment advisors a platform to post their ideas and through the use of logical rules validations and smart filtering, the platform is able to generate investment suggestions and products that are relevant to that idea. Going a level deeper, the platform then gives the relationship managers clear call to action by matching each of those products to clients that are appropriate and suitable.
Let’s focus on the bigger picture
But to overcome all these last mile challenges takes more than just a Digital Advisory platform. Andrew concludes the event by talking about the need for the industry to collaborate to take a much broader approach to solving these last-mile challenges. Industry solutions such as Symphony and Contineo, which was co-founded by AGDelta, have demonstrated that an industry collaboration in WealthTech can have a far greater impact than any individual developer. And we host events such as these so we can help bring different wealth managers together and start creating a community of collaboration and WealthTech adoption. We hope this will be the one of many to come and we hope these series of events and gather will ultimately push the industry forward in a positive direction.