During this period, more direct-to-consumer offerings came into play.
The emergence of ‘robo-advice’ journeys enabled investors to move into existing and defined model portfolios, whether by risk-based or thematic approaches, demonstrating the value of digitised workflows and consistent portfolios.
Robo has now more or less been parked by the industry, but it paved the way for more thought-through D2C propositions and hybrid advice solutions to take on the challenge of harnessing digital processes to propel investors into and along a cost-effective advice journey.
Embracing digital for everyone’s benefit
As the 2020s kicked off in a way no-one could have foreseen thanks to Covid-19, the digitisation of the financial services industry moved at a dizzying pace by necessity.
Cutting out paper and wet signatures wherever possible became an instantaneous non-negotiable, with consumers and providers unable to handle documents or meet face-to-face. The pandemic is still so fresh in our minds that I need not dwell more on its effects on our sector.
What is key is that technology has enabled centralised investment propositions to go retail, empowering clients to access model portfolio services and discretionary fund managers via their advisers in a cost-effective manner.
Data is now a commodity (the new oil say some), and a new lens of understanding investments is in place.
What was cutting edge is increasingly mainstream: consolidated portfolios and total wealth, x-rays of underlying investments and performance, exposure to unique insights around ESG and potential vulnerabilities, and benchmarking against goals and markets.
Wealth tech platforms rising to the challenge
The expansion in the number of investment platforms in the UK was triggered by growing opportunities to help advice firms enhance their client proposition and position themselves as managers of good financial outcomes.
Using a platform offered clear benefits via bulk buying and selling of investment vehicles, with firms able to lean on their platform partners for administrative and operational support. This included paying income to clients and delivering adviser charges to firms.
Every platform boss will say they are distinct in their offerings to advice firms, but what is indispensable today is that a platform must be able to apply technology to help reduce cost, provide consistent quality, create scale in advice and service, and support investment specialties such as CIPs and DFMs.
To get to this position has been an evolutionary process over the past decade and not all platforms are quite there yet.
Integration between systems and data availability has been a necessary ingredient in enabling increased transparency and better access to information, in alignment with Mifid II.
And in the last few years the digital revolution has allowed providers to explore more qualitative areas of advice, personalising the experience so each investor feels understood, acknowledged and represented.
