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How To Transform Hyper-Personalization in Financial Advice

Key takeaways

  • With so much data available, using the data and making a meaningful representation of investment counts.
  • Clients are often only prepared for success, giving them an illusion that their risks will lead to significant payouts, even though the reality is often more tumultuous.
  • People want advice; there’s just a gap between this demand and the execution.

Ganesh Ram

MD & Chief Executive Officer at Mutual Fund Utilities

MD & Chief Executive Officer at Mutual Fund Utilities

Qn 1: What are your thoughts on the recent increase in hyper-personalization in financial advice?

Answer: There’s a huge surge of technological wealth-based advice as can be seen by the rise of Robo-advisory in India. Usually, asset management companies in India operate in the traditional ways, and the ‘big guys often dominate the mutual fund business’. However, regulators are showing keen interest in technology-driven companies like Xeroda. App-based Fintech platforms have surged tremendously, and these apps offer asset management across classes, including mortgage loans and mutual funds. India’s investor base has increased, of which a sizable percentage of millennials are within this pool, signalling that people are investing more and using more financial services, especially digital platforms.

Qn 2: What is an example of how personalized financial advice can work in the future?

Answer: With so much untapped data around, clients are often overloaded with information. Sometimes, clients don’t fully understand their options and misunderstand the functions of the services available. Clients need to identify their goals and what they’re investing in. The convenience in starting often undermines the journey behind the long-term and goal-based track to wealth management. Clients’ realistic perception of their investment structure would contribute to an increase in and stability of using asset management tools.

Qn 3: How do you think the use of hyper-personalization will change banking over the next 5 years?

Answer: Progress in the next 5 years looks optimistic. However, the personalization of information must evolve with each client because the client who started investing during the early stages of his career will not have the same goals after a certain number of years or after he has reached his initial goal goals. Wealth managers should work towards offering worst-case scenarios and warnings to prepare clients for down markets. This would help them manage their expectations and recovery better and faster. There’s a responsibility to engage clients continuously and stay invested in their money management to offer truly personalized advice.

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