Hybrid Advice Sets Wealth Management on New Course


Hybrid advice solutions are making a big impression on HNWIs, becoming just as valued as wealth manager-led offerings, and more so in some areas. HNWIs tend to reduce their sole reliance on wealth managers and adopt more of a hybrid approach as the wealth management relationship progresses. In the early stages of the relationship, wealth managers remain at the center of the relationship. HNWIs in Asia-Pacific (excl. Japan) and Europe were the most inclined to embrace hybrid advice, while those in North America were the least. The youngest HNWIs and the wealthiest HNWIs also showed a preference for hybrid services. Firm executives for their part expressed high levels of enthusiasm for hybrid advice models.

Despite their support of hybrid advice models and the significant potential benefits on offer, most firms have yet to roll out effective solutions, though many have initiatives underway. In addition to moving slowly, firms are falling short in delivering hybrid solutions that are fully satisfying to HNWIs.

The pace and effectiveness of hybrid advice efforts can be improved by focusing on people, process, and proposition-related transformation. Key areas of transformation include the advisory model, talent, segmentation, data and analytics, proposition and pricing, and cultural change.

While hybrid advice models offer numerous benefits, they also raise the possibility of serious consequences for the industry, including reduced profit margins and greatly altered roles for wealth managers. The most serious risk of focusing on current hybrid-advice implementation challenges is getting blindsided by new digital capabilities, such as voice-based interfaces, or non-traditional competitors, such as BigTech firms

Most Prominent Interaction Preference for Wealth Management Capabilitiesa, Q2 2017

Most Prominent Interaction Preference for Wealth Management Capabilitiesa, Q2 2017

a. Respondents with experience with the interaction in the past year have been analyzed
Note: Question asked: “How would you like to interact with your primary wealth manager or wealth management firm for each of the following services? Please provide your view on which of the above client-facing capabilities are most important to be ‘Fully Wealth Manager-Led’, ‘Hybrid’, or ‘Fully Automated’”; Respondents were asked to rate on a scale of 1–3 with 1 being ‘Fully Wealth Manager-Led’, 2 being ‘Hybrid’ and 3 being ‘Fully Automated’; The above values represent the score of out 3; Interaction scores ranges 1 to 1.66 (Fully Wealth Manager-Led), 1.67-2.33 (Hybrid), and 2.34 to 3 (Fully Automated); Total 37 Executive Interview responses included
Source: Capgemini Financial Services Analysis, 2017; Capgemini Global HNW Insights Survey 2017; Executive Interviews, 2017; World Wealth Report 2017, Capgemini