The rise of robo advisors has highlighted the potential for technology-led innovation in the wealth management business model in Europe and beyond. Robo advisory services can enable established wealth managers to look beyond the high-net-worth/ultra-high-net-worth (HNW/UHNW) segment and engage the mass affluent market, as well as the new generation of tech-savvy, self-driven investors. Younger generations of millennial investors tend to be self-directed, rely on several sources of advice and are not particularly loyal to an institution. Emerging models that combine automated advisory services with traditional wealth management offerings are attractive to this segment. In addition to generating new sources of revenue, these models also drive down costs.
However, advice is only one of the opportunities introduced by automating components of the wealth services ecosystem. Digital intervention now spans the entire wealth management value chain, from onboarding, profiling and goal-setting, to strategy, execution and monitoring. Using digital approaches, wealth managers can provide differentiated offerings to their clients.