New research shows that affluent investors demand bespoke portfolios, AI-enhanced performance modeling and interactive presentations. Can this be done at scale?

Avaloq recently surveyed over 1,400 affluent-to-wealthier investors internationally and made some eye-opening discoveries. In APAC:

  • 54 percent of them said that getting highly personalized service was a «must have.»
  • 30 percent of them said that they would switch advisors to get more personalized service.
  • 29 percent said they would consider switching if their advisor failed to adopt new technologies.

Many advisors still attempt to personalize proposals by laboriously «copying-and-pasting» data from disparate systems into hand-typed formulas in a spreadsheet. Others standardize proposal elements and repeat them for several clients. Either approach can hobble the advisor with a rigid one-off folio that is laborious to modify.

In a market where competitors with more advanced capabilities offer creative, personalized services, advisors who use these approaches may be at risk of losing both assets and clients.

What Does Personalization Mean?

For starters, personalization means bespoke portfolio and product proposals, tailored to the client’s individual risk appetite and aspirations.

But that’s no longer enough. Today, 57 percent of the APAC investors we surveyed also want to hit Environmental, Social, and Corporate Governance (ESG) goals. Success with these clients requires addressing several objectives at once.

To build confidence, it’s best to model the portfolio responding to potential real-world events, such as a recession or a pandemic, while referencing relevant news. To bring it fully to life, visualizations help make it concrete and comprehensible, increasing acceptance rates and share of wallet.

How Can Personalization Be Increased At Scale?

Personalized service at scale naturally causes a hard-to-manage explosion of complexity. It is nearly impossible to accomplish with copy-and-paste proposals.

It can be accomplished with a system designed for it. Such a platform should work atop any core banking software, as does Avaloq Wealth. Spanning the CIO, PMs, advisors, compliance officers, and RMs, it would unify the entire investment value chain on a single integrated set of data.

Ideally, the advisor would toggle the same system into «client mode» to create a personalized presentation for engaging discussions, even adapting the portfolio on the fly. Such elegance can deepen the client’s understanding of potential risks and opportunities, increasing acceptance rates.

What Technology Would Make Clients Switch?

Besides personalization, the APAC investors we surveyed also wanted their advisor to harness Artificial Intelligence (AI), with 59 percent of them indicating that AI could be brought to bear on performance analysis—a perfect application of this technology.

Machine learning can assist by recommending trades or picking underlying’s for a structured product. It can cost-efficiently tailor derivate products to match the client’s risk appetite, time horizon and investment philosophy.

Investors’ desire to benefit from AI-driven services should not be seen as an intent to replace their advisors with AI. But advisors who cannot bring AI enhancements to their client's portfolios stand to lose them.

Is It Possible To Accomplish All of This?

State-of-the-art systems can deliver all of this and more, even while providing staff with a low training hurdle. In fact, a user interface based on Google Material Design, such as the one in Avaloq Wealth, will make the software familiar and useable from the start.

Workflow design is equally important. The processes the software enables need to match the processes your staff understands, so they can extract full value from the system. To ensure this is the case for our clients, Avaloq conducted hundreds of exhaustive on-site interviews before we wrote a single line of code.

Finally, architecture is paramount. You want:

  • Modularity and compatibility with any core banking system
  • Easy to understand APIs to unlock flexibility and extendibility with 3rd parties
  • Personalization through artificial intelligence
  • A Cloud-ready software that can dramatically decrease run costs