Clients forecast shunning advisers in favour of tech by 2030

Over half of investors expect technology to become so advanced that they wont use a financial adviser by 2030, according to a global report by LSEG.

In a report The Future of Wealth: The Changing Role of Financial Advice, LSEG surveyed 2,000 investors and senior executives at 250 wealth management firms across Asia Pacific, Europe, the Middle East and North America. 

Some 49 per cent of those who use an adviser already and 61 per cent of those who don’t use one currently said they expect not to use one in 2030 because of technology.

Sune Mortensen, head of wealth solutions at LSEG, and Sarlota Hohwald, director of content solutions, said: “Most investors agree that they are more willing to pay for financial advice when faced with market volatility and complexity, but a majority (54 per cent) also think that advances in technology mean they won’t be using one by 2030.

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“Going forward, advisers will need to demonstrate the adviser-client relationship adds real and tangible value specifically through personalisation and the delivery of trusted advice.”

The areas that clients value most from an adviser are investment advice they could trust, that the adviser helps them meet their goals and the adviser helps them with investment ideas.

In line with the advancements in technology, LSEG recommended advisers leverage this tech themselves to provide cost-effective, digital support for clients that could also be personalised. A recent report by EY highlighted “hyper-personalisation” of their client offering is a key for advice firms and can strengthen client relationships and perceived net value. 

Specifically in APAC, 75 per cent of respondents expect their providers to offer digital experiences that are on par with leading digital companies and 62 per cent want providers to deliver better digital solutions so they can manage their investments directly, a higher proportion than in other regions.

Hohwald said: “Our research supports the view that digital capabilities and adviser advice both have value in the wealth space, suggesting that hybrid models will gain traction in the future. A hybrid investment model encompasses both digital and adviser elements and this, in turn, means that providers will need to strike the right balance – and offer an optimal mix of data, technology and human expertise. 

“A delicate balancing act between leveraging next-level tech to enable streamlined, digital support, and adding personalised touch points will be key to long-term success.

“Although it is clear that their role must continue to evolve against a changing wealth backdrop, the efficient use of technology can empower advisers to boost their productivity, easily access broad and deep data, and deliver value-added insights that will underscore their most valuable offering: trust.”