The hybrid model: the future of financial advice


The financial advice landscape may be changing but according to Jo Howes, Commercial Director at Crealogix, new technology still has a long way to go before it catches up with human expertise.

Just over a decade ago, wealth management services were accessed exclusively by the very wealthy, say Jo Howes, Commercial Director at Crealogix.

However, thanks to robo-adviser services, many of which launched in the wake of 2008 global financial crisis, the barrier to entry has been lowered. Harnessing the power of technology, robo-advisers have automated parts of the investment process to offer a cheaper, efficient and flexible alternative to traditional services. Their popularity, particularly amongst those with smaller sums to invest, has soared.

Despite the move towards the convenience of automated services, Howes maintains that robo-advisers are still no match for the human touch of a ‘hybrid’ approach; both in terms of the advice and reassurance on offer.

“The traditional approach of travelling to meetings in a physical branch or office is highly off putting to the modern investor,” she says, “but they still want the human touch.”

There are also certain areas where algorithm-led advisers fear to tread, says Howes, whose company works with banks to provide fintech solutions. As she explains, “For the wealthy with complex financial situations, robo-adviser parity with humans is still a long way off.”

She adds: “Hybrid robo-advice is therefore the best option for wealth managers, with the on-demand convenience across platforms that robo-advice offers, but also featuring an easy switch for clients between self-service, chat, and video call support when they need assistance from expert advisors, bridging the benefits of digital and human services.”

Most analysts agree. Accenture’s report ‘The Rise of Robo Advice’ noted that most robo services, “won’t meet the needs of investors with even moderately complex financial lives.”

The Accenture report highlighted several areas where human advice remains essential, including, “reassuring clients through difficult markets, persuading clients to take action and synthesising different solutions.”

Howes maintains that the current state of play is likely to persist for quite some time. “In the future, it is feasible that data-driven wealth platforms and robo-advisory services begin to outperform human quality,” she says, “but realistically, the technology has a long way to go to achieve this without a human involved.”

Software such as Focus Wealth attempts to offer a balance of convenience, technology and the human touch, with clients able to co-browse with advisers, but also able to check in on investments at any time.

The future of advice is to build on the hybrid approach using technologies such as artificial intelligence to improve the services of a human advisor.

As Howes, explains, “The technology is there to build the initial foundations [of a better robo-advisory platform].

“For example, at Crealogix, we’re developing AI systems that analyse conversations that are, by-law, recorded between clients and wealth managers.

“The AI can get to know the investor, picking out keywords and themes expressed in the conversations, and offer tailored advice based on what customers care about and how they respond.”