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SEBI Office: Plot No. C4-A, 'G' Block, Bandra-Kurla Complex, Bandra(East), Mumbai - 400051

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Wealth management: Combining technology IQ with personal touch EQ key to servicing new-age clients

Article • Investment Management

Firms needing to get the IQ and EQ balance right in the solutions that they provide

Soumya Rajan
Founder, MD and CEO at Waterfield Advisors
OCTOBER 09, 2019
   

There is considerable discussion and debate around how technology is transforming our lives every day, every hour. Artificial intelligence (AI), access to digital platforms and automation of processes are increasingly becoming a reality in all aspects of our lives. The mushrooming of countless fintech companies is testimony to how technology is replacing parametrised, repetitive work in financial services companies and how big banks are actively pursuing digital solutions to lower their customer acquisition, transaction and delivery costs.

As an industry veteran for over 25 years, when I first entered the wealth management space, the “relationship” aspect of managing a client was deemed paramount. You could always bring in the investment experts, but the ability to connect with the client was why a customer stayed with the organisation. Over the years, I’ve seen that change. Clients were getting more discerning. They were demanding that their wealth managers be intellectually sharper and more knowledgeable—individuals that could break down complex problems, connect the dots and find simple elegant solutions. This resulted in front-line, client-facing professionals that needed to have more technical skills. Today, we are on the cusp of one more wave of change, where technology is replacing the routine technical and analytical work. With this growing “digitisation” of the workplace, should wealth managers be wary of the future, in terms of their relevance, skillsets and the needs of their clients? And, do they need to reinvent themselves yet again?

Over the next 10 years, an estimated $15.4 trillion will transition to the NextGen. This sum is equivalent in value to the entire Chinese economy or 17 times the market capitalization of Amazon. This wealth transfer will be carried out by almost 550,000 individuals, indicating an average of $28.2m being passed on by each person. This is an unprecedented transfer of wealth to a generation of digital natives. But let’s keep these statistics aside for a moment and consider the following real-life situations – a client is getting divorced and needs help in her financial planning, a couple with considerable wealth has a special child that needs to be cared for after they are no more, the succession plan for a family owned business that entails an unequal distribution of wealth from one generation to the next, a founder who has had a significant liquidity event but has no understanding of financial or tax planning for their personal assets, a client has a deep need to channelize her wealth towards philanthropic and social good, the main breadwinner of a very successful business being tragically killed, with the family having no idea where to start in terms of picking up the pieces of either the business or personal assets.

All these are instances that many of us, as wealth practitioners, would have encountered. If I pause to think, would AI or technology, in isolation, have been able to help or solve any of the problems that these clients encountered, the answer would be a “no.” Yes, technology and AI or what I call the “IQ” of Wealth Management can help in certain aspects of wealth management, but the deeper need to connect emotionally and personally, the empathy or “EQ” of a Wealth Manager to such client situations is distinctly human.

We often hear clients repeatedly sharing in their feedback surveys to wealth management firms that they seek “holistic advice” from their providers. I interpret this as firms needing to get the IQ and EQ balance right in the solutions that they provide.

AI will be a key driver in supporting complex investment decisions and ensuring greater transparency, but this will soon become the lowest common denominator and AI will not differentiate one firm from the other. Rather, it will be the trust and intellectual heft of wealth managers in a firm, to be able to find collaborative solutions for complex problems that will drive market share in this business. Equally, wealth managers will have to help their clients prioritise financial EQ to foster a more positive attitude in their clients towards their financial assets.

All this means that wealth managers will have to reskill themselves. They will have to offer more than what is simply available at the swipe of a client’s touch screen smartphone.

From the Vault

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*Kindly note that this form does not operate as a job portal, and the HR Team will not receive information regarding your candidature
Follow Us
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Follow Us
linkedin youtube twitter instagram
Offices

142, 14th Floor, Maker Chambers VI, Nariman Point, Mumbai - 400021

7, Avighna House, 82, Dr. Annie Besant Road, Worli Naka, Siddharth Nagar, Worli, Mumbai, Maharashtra 400018

SEBI Office: Plot No. C4-A, 'G' Block, Bandra-Kurla Complex, Bandra(East), Mumbai - 400051

18B106, 18th Floor, Berger Delhi One, Sector 16B, Noida - 201301

SEBI Office: NBCC Complex, Office Tower-1, 8th Floor, Plate B, East Kidwai Nagar, New Delhi – 110023

Bengaluru

Level 5, No. 501, Prestige Garnet, 36, Ulsoor Road, Bengaluru – 560042

SEBI Office: 2nd Floor, Jeevan Mangal Building, No.4, Residency Road, Bengaluru - 560025

Chennai

Workafella No.10, Uthamar Gandhi Salai, Nungambakkam High Road, Nungambakam, Chennai - 600034

SEBI Office: 7th Floor, 756-L, Anna Salai, Chennai - 600002

Unit No. 701, A Wing, 7th floor, Sunteck Kanaka Corporate Park, Patto, Panjim, Goa - 403001

SEBI Office: 6th Floor, EDC House, Atmaram Borkar Road, Panaji - 403001, Goa

1-111, Raheja Woods 8, Central Avenue, Kalyani Nagar, Pune, MH 411006

SEBI Office: Plot No. C4-A, 'G' Block, Bandra-Kurla Complex, Bandra(East), Mumbai - 400051

Kolkata

916, PS Arcadia, Level 9, 4A, Camac Street, Kolkata 700016

SEBI Office: L&T Chambers, 3rd Floor, 16 Camac Street, Kolkata - 700017, West Bengal

Gujarat

GA-04, Block15, Ground Floor, Pragya Accelerator, Rd 1C, Gift City, Gandhinagar - 382355, Gujarat