Page 28 - Investment Advisor June 2022

Wealth Management

“As an industry, we
really want to drive
our aspiration to

serve more households
[in] an increasingly
personalized way. We
have to embrace these digital
engagement practices, and the

good news is [that] the capability
increasingly is there.”

—Michael Durbin, president of
Fidelity Institutional Four Ways Financial Advice
Is Evolving: EY
The Need for Tech
There is “amazing technology and innovation” available to advisors Wealth advice is advancing, a new Ernst &
today, said Durbin. Advisors, for instance, can use artificial intel- Young report says. Firms must adapt or risk
ligence to gain insights from all the data available. He added there being left behind.
are now 65 million investor households in the United States.
“As an industry, we really want to drive our aspiration to Advisors who work with or for wealth managers and private
serve more households [in] an increasingly personalized way,” banks may soon see shifts in how they interact with clients and
Durbin said. “We have to embrace these digital engagement provide their advisory services. Indeed, according to a new paper
practices, and the good news is [that] the capability increas- by Ernst & Young (EY), the blending of people and digital tech-
ingly is there. We see it in our consumer life outside of finan- nology will allow them to “deliver wholly personalized advice.”
cial services every single day.” Changes will go even beyond that as competition intensi-
But he warned: “The reality is we’re not going to drive fur- fies and firms leverage both digitization and M&A to vie for a
ther adoption of financial services through American house- larger share of client assets.
holds if it’s only ever going to be led by the local human advisor Further, these firms will cut costs by “exiting non-core mar-
in the local branch office. It’s a fantastic channel, by the way. kets” and instead restructure and combine services with retail
It’s the lifeblood of our industry. But if we really want to get banks, according to the paper’s authors, Jan Bellens, Mike
this aspiration of financial inclusion and penetration it’s going Lee, Valerie Nott and Mark Wightman. As early as 2030, cli-
to have to be done through technology.” ents can expect an experience that “will be radically different
Fidelity’s own research, meanwhile, has shown that from today,” the paper states.
although older investors (boomers and older) value advisors
managing their money the most, “they also say their advisor is How Things Will Change
spending too much time on managing the money and, in fact, Six factors will define these future changes:
they want help on other elements of advice, which is where • Continually updated data-powered automated insights
the younger generations put the premium,” Durbin said. that adjust to needs and circumstances.
Those other areas in which clients want their advisors to • Client-tailored experiences.
spend more time include financial planning, helping them • Holistic advice that crosses traditional and new wealth
achieve “peace of mind,” and helping them to match their products and services.
beliefs with responsible investing and capitalism, he added. • High levels of transparency and trust.
• Stronger, clearer value creation for all stakeholders.
No Crypto ‘Clarity’ • Enhanced global participation and accessibility.
In addition to personalization, the other major trend now is The research suggests that wealth and private bank advi-
increasing demand for digital assets, according to Durbin. sors can “build loyalty and revenue by demonstrating clear

26 INVESTMENT ADVISOR JUNE 2022 | ThinkAdvisor.com