Guiding our way through disruption


Guiding our way through disruption

Katherine Milesi explores the new world of disruptive innovation in financial advice into the future.

Deloitte research domestically and globally suggests that the next wave of disruption in financial advice will be driven by ‘guidance platforms’. A guidance platform is distinct from ‘roboadvice’ in three key aspects.

Guidance platforms are:

1. Omnichannel solutions – providing a seamless integration of the human financial advisor and the digital self-serve experiences

2. Enabled by behavioural design and psychology – solutions that are designed to help overcome the biases that prevent consumers from achieving their goals

3. Built on highly scalable, data rich platforms – using exponential technologies to integrate and derive deep insights into customer needs.

1. Omni-channel solutions

Robo solutions can provide inexperienced investors with a digital sandpit to explore options at their own pace. At times of market volatility they provide a highly scalable and cost-effective mechanism for engagement, reassurance and tailored advice. Common examples include bot-based enquiry management and automatic rebalancing of portfolios.

However, consumers also demand seamless interactions across all channels. At multiple points in financial advice processes, customers will want to speak to a human expert to be confident in the actions they are taking. This is why human financial advisors are not disappearing. Rather, advice business models are adapting as the low value tasks are eliminated from workloads and expectations for insights from advisors is increasing.

In the past few years providers like Vanguard Personal Advisor Services and QSuper’s Plus Advice offering have introduced blended channel capabilities to help cater for these kinds of financial advice needs. The design of the solution must be truly omnichannel in nature, and deliver a seamless experience across all channels.

2. Driven by behavioural design and psychology

The advisor of the future - be they human advisors, a team of advisors supported by the right digital platform and tools, or an automated ‘robo’ advisor leveraging artificial intelligence, sensing tools, and proprietary algorithms – must understand the investor at a deep level, including the investor’s psychology, preferences, and even mood swings.

Early examples of guidance platform functions include:

  • Pre-commitment devices to help execute planned saving and investment goals, e.g. Acorns
  • Alerts designed around availability heuristics when a  customer exceeds planned spending limits as implemented in PFMs like Moneysoft, PocketBook and MoneyBrilliant
  • Social proofing and gamification to highlight the positive actions peers are taking, like reviewing their budgets and insurances e.g. HelloWallet.

By applying motivational psychology and behavioural economics, digital and human advice offerings will expand the behavioural design methods and guide the coherent application across channels.

3. Data rich platforms

Big data, machine learning and artificial intelligence (AI) are on the cusp of transforming wealth management, with new ways to engage new clients, manage client relationships and manage risks.

Guidance platforms will access a range of internal and external, structured and unstructured data sources, making sense of that data with continuously evolving algorithms to generate next best actions and insights for advisors and investors. We expect that sensing tools (like the Internet of Things, social media analyses) and cognitive computing capabilities, will continue to expand the scope of advice and revenue opportunities that can be automated from investment and insurance to well-being and beyond.

Financial advice fuelled by richer data insights will also help deliver significant long-term cost efficiencies to financial advice institutions through reduced costs not only through more efficient and robust fact find processes, but more importantly through reduction in downstream compliance costs.

This is not a simplistic, short-term process and one that must be done with a keen eye on cyber and data governance risks. It will take a concerted effort from regulators, fintechs and financial institutions working together to design standards for the secure transmission of elements consumer data to enable financial advice.


Given the continuous and deliberate nature of disruption in financial services, advice business leaders must maintain a focus on understanding:

  • What channel choices customers are making for high and low value advice interactions
  • Which behavioural traps may exist in your processes that are preventing customers from achieving their intentions
  • What data and technology is available to enable deeper insights and efficiencies.

Integrating the answers to these questions can guide the way to new, disruptive and highly profitable advice models.

This article was first published in Asia-Pacific Banking & Finance.

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