GlobalData Plc

Digital wealth managers’ human faces will entice clients

UK digital investment managers, which very cautiously avoid the confusing “robo-advisor” label, have started inviting their clients (and prospects) for face-to-face meetings. This approach will prove successful.

A new robo-advice or online investment management platform is being launched in the UK every month at present, but they all face the same challenge: how to quickly build assets under management to secure profitability. Unable to compete with incumbents’ marketing budgets and established brands, they also have limited opportunity to build relationships with prospective clients, given their digital focus. But it appears the robo-advice industry has understood it needs to show its human face.

Scalable Capital, an online wealth management platform operating in Austria, Germany, and the UK, held a series of Investment Summit events in August 2016 both in Germany and the UK. Available for free to anyone who registered, these conferences gave prospects a chance to hear more about the platforms’ investment approach, but above all to meet in person the people delivering it.

MoneyFarm, a digital provider originating from Italy (where it already trialed a physical pop-up boutique earlier this year), recently co-organized a lifestyle event in London about managing risk in everyday life. The talk was followed by a MoneyFarm representative’s speech on risks in investments. Both Scalable Capital and MoneyFarm also regularly host online webinars allowing a sneak peek into how their platforms operate.

All these events are a good attempt to engage with investors who remain reserved or skeptical about digital-only providers’ ability to manage their assets. Our 2015 Global Wealth Managers Survey shows that good relationships with current human advisors and a lack of trust in technology are the main factors deterring UK HNW individuals from robo-advice. And our conversations with digital competitors confirm this, as they admit that establishing brand awareness and trust among investors are key success factors.

It is our view that money spent on marketing webinars or investor conferences rather than a platform itself can in fact be more effective. Online providers should also broaden their marketing activity beyond digital channels. While more costly, doing so means they will reach a greater number of prospects. And as digital platforms’ representatives are very convincing when presenting their business models at industry events, using their interpersonal skills to persuade their target clients to use the service will pay off.

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