Hybrid advice was the topic of the day at the recent Advice Tech forum.
The forum, which is run by AdviserSoftware.com and gathers views of experts from across financial services, investigated how the hybrid advice market was evolving and was likely to shape advice and servicing propositions in the future.
Experts from advice firms, tech vendors, product providers and platforms, addressed questions such as whether the current suite of solutions can meet the needs and challenges of adviser firms and how adviser firms can use hybrid advice to automate and streamline their client-facing and back-office activities.
Making sense of hybrid advice
Martin McKenna, senior consultant at Financial Technology Research Centre, said hybrid advice was starting to challenge the way people thought about addressing their client bank.
"Some people have looked at hybrid advice as a way of interacting with their current clients in a better way," he said.
Andrew Storey, group innovation director at EV, highlighted the “algorithmic” nature of hybrid advice, stating this “makes the difference between a digitally enhanced process and a hybrid advice process”.
But Tim Thompson-Rye, chief technology officer at Progeny Group, noted hybrid advice was “evolving” and opted for a broader definition, as he said: “Hybrid advice is the delivery of advice through a combination of some technology and some humans.
"You’ve got robo-advice, which is entirely tech, and then you’ve got traditional financial planning or wealth management, which is almost entirely humans. Hybrid advice just straddles that middle ground.”
Similar to McKenna, Thompson-Rye noted a good hybrid advice proposition was “one where the tech enhances the relationship that the client has with their adviser rather than one that removes the relationship or detracts from it in any way."
Thomson-Rye also noted that a strong proposition enabled the client to transition between the tech-driven elements and the human-driven elements as they wish, with Mckenna summarising, “hybrid is people and technology”.
Transforming financial planning
Thompson-Rye pointed to some of the key reasons an adviser would adopt a hybrid advice proposition.
Noting that we live in an increasingly digital world and that much of the younger generation seeking financial advice were digital natives, he observed: "Client expectations have shifted towards more immediate access to information, communication, advice and also a degree of control over that process.”
In a changing culture towards how we interact with financial advice, many agreed that hybrid advice propositions have become even more critical.
Thompson-Rye did however caution against making assumptions when considering a hybrid advice proposition.
He noted there was a "danger of stereotyping and assuming" that high-net-worth clients would primarily opt for face-to-face advice, when the opposite seemed to be true. Research suggests with a higher AUM comes a greater propensity for tech-based interactions, he said.
