The channels through which financial services are provided in the UK wealth market are undergoing a transformation. With an influx of new entrants offering digital platforms and robo-advice, traditional wealth managers are now responding to the rise in demand for automation, according to research and consulting firm GlobalData.
The company’s recent report, which analyses the UK wealth management space, indicates that traditional wealth managers are starting to embrace the ability to resonate with audiences on a digital level while still offering professional advice from a wealth manager or private banker.
Nicole Douglas, Financial Analyst for GlobalData states: “According to our 2016 Global Wealth Managers Survey, 49.5% of wealth managers believe the demand they currently experience for automated investment services will increase in the next two years, indicating a noticeable proportion of the market prefers digital platforms in which to carry out investment decisions or seek advice.”
According to Douglas, automated services are becoming more prevalent in the UK market but do not pose an immediate threat for traditional wealth managers. She explains: “Advisors are not likely to be replaced by robots in the near future. Our data shows 87% of wealth managers disagree with the statement that traditional wealth managers will lose market share to automated investment services – or ‘robo-advisors’ – in the next 12 months.”
In short, there is still demand for having investments managed professionally. GlobalData’s research shows that lack of expertise and time are the two most common reasons wealth managers believe HNW clients opt to have wealth professionally managed.
As such, wealth managers will do well to continue providing personalized advice and embrace digital capabilities as a supporting role. Douglas explains: “Our data shows that 67% of wealth managers agree with the statement that investing in automated investment services can complement their existing offering.”
GlobalData believes that investing in automated services will prove successful for competitors in the UK market., and wealth managers will come to experience that an offering with both human and automated components resonate with a range of investors.
- Information based on GlobalData’s report: Wealth in the UK: Competitive Dynamics 2016.