Designing for humans in wealth management

Wealth management firms must adapt their model, infrastructure, and workforce to ensure customer interaction is a low-friction, enjoyable experience, David Levi writes.

In a fast paced financial services landscape, organisations are beginning to recognise the importance of creating personalised services that adapt to unique human behaviours and ultimately shape the quality of customer journeys. The wealth management sector is no exception. 

Technology is evolving rapidly in this sector. Digitally-led hybrid advice, differentiated for client experiences, is upon us already and it’s causing traditional wealth management firms to rethink the way they provide service to clients. 

Meanwhile, digital disruptors willing to provide new and enticing customer engagement models are coming from all directions. For instance, Google is serious enough to have commissioned a study in 2014 on how it could enter the asset management arena, hoping to compete by disintermediating entire industries, becoming the gateway for information and decision-making.

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As a result, today’s client expects a new kind of wealth management experience – offerings that understand their perspective and deliver more informed, more personalised, more transparent, and more collaborative services. 

To respond to the changing customer expectations and these startling new market entrants, wealth management firms need to embrace design thinking to create meaningful experiences for their customers. 

The key is in creating long-term, personalised experiences. This means using digital tools to make a more collaborative, goals oriented financial planning experience the centre of the adviser/client relationship: changing the focus from tracking individual returns to monitoring progress against financial goals over time. Working together, advisers and their clients can build better outcomes and new value.

Meanwhile, empowering advisers with more detailed client information, as well as with mobile tools, can make them more readily and directly accessible and thus even more responsive to client needs. 

By leveraging analytics, companies suddenly have a potential level of insight they’ve never had before; an insight into how people think, what they want, and how they react. Designed with this in mind, wealth management technology can operate on a scale that’s simultaneously more grand and more granular. It can operate at a human level.

If wealth management firms understand their customers at a human level and design their digital services to suit their needs, they will create much stronger customer relationships.  They will be able to deliver services that are more adaptive, responsive, and aligned to the goals and actions taken by customers and employees alike. 

With more data on the ways people interact with technology, coupled with computing power capable of processing these massive streams of information, wealth management businesses can now reshape everything from the interfaces customers and employees rely on, to the larger engagement journeys they make possible.

Take robo-adviser servicing start-up Betterment. It uses smart design to provide a friendly and intuitive way to guide customers to the right investment decisions. While machines do the math and complicated logic, Betterment’s design features, including questions to prompt the right actions and tax impact previews offer the best potential options based on its customers’ behaviour. Investors can then make choices to help achieve their long-term goals in a simple and engaging way. 

Working to minimise the ‘behaviour gap,’ losses that result from human investors taking short-sighted actions, Betterment’s dashboard actually hides a portfolio’s daily performance, knowing that the human tendency is to overreact to volatility.

Instead, their site is designed to encourage customers to take fewer actions, minimising the risks of the behaviour gap, and maximising long-term profits. 

This approach has created an ongoing journey with Betterment’s customers that, like a human financial manager, follows an investor’s goals, monitors progress toward those goals, and guides decision-making needed to stay on track. And this behavioural approach is working. 

A recent report from Morningstar found that over the past 10 years, behaviour gaps cost individuals an average 1.32 per cent of returns per year. But investors using Betterment have a behaviour gap of just 0.31 per cent per year. For Betterment, these investor savings translate into brand loyalty and advocacy for its financial services. 

The technology itself is impressive, but more importantly, it is built around a thorough understanding of human interactions, both with machines and with other humans. Experience-led design, from the user’s perspective, enables the client to complete tasks effectively, efficiently and intuitively. And, it allows each user only to see what is necessary and applicable, rather than wading through a standard stable of products and services, of which they may only require a fraction.

Such approaches are necessary as customers today expect greater personalisation. Regardless of a business’s target or degree of flexibility, firms will need to design specific service models that align with profitability targets for each client segment. 

Today, many firms still utilise a full-service model for clients with revenue outside of the parameters designed for the full‑service model. As competition increases and drives prices lower, firms should be more disciplined in their approach.

Wealth management firms must adapt their model, infrastructure, and workforce to ensure that every customer interaction is a low-friction, enjoyable experience that fits with the way customers want to interact.

There are four actions wealth management firms must take to ensure they are designing their services for unique human behaviour:

1. Condense human touch down to the firm’s most important interaction, and draw on artificial intelligence to deliver them at the right time. 
2. Develop a good way to guide customers in and out of the stream of human interaction, recognising what the customer is doing, and having the right intervention at the right time. 
3. Develop advice-based experiences that add value. Loyalty and reward programs, and family education regarding upcoming wealth transfer, are just a few of the ways your firm can add value to standard advisory services.
4. Explore a hybrid advice model. Leverage the strengths of your human and machine workforces, encouraging human interaction or self-service where desirable.

When technology works with people, they will use it. When it doesn’t, they’ll abandon or ignore it. Doing this right means making fundamental changes to the way companies do business every day, from architecting their systems, to better understanding behaviour, to rethinking their interactions with customers and employees, as well as seeing products and services take on new roles as pieces of a larger customer journey. 

Those who are up to the challenge have the potential to reimagine their relationship with people, from one that lasts the length of an interaction, to one that persists over a lifetime. 

David Levi leads Accenture’s wealth management practice in Australia and New Zealand.