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How To Transform Hyper-Personalization in Financial Advice

Key takeaways

  • Personalized advice is vital because each profile is specific to the client, and no one advice is a solution for all.
  • Trust is an important factor that affects clients’ incentives to choose a particular firm’s service.
  • Digital capabilities can complement human responsibilities in maintaining relationships with clients strongly.

Sameer Kaul

MD & CEO at TrustPlutus Wealth Managers (India) Pvt Ltd

MD & CEO at TrustPlutus Wealth Managers (India) Pvt Ltd

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

Answer: Clients are more inclined to expect builds to suit models in banks. However, it’s essential to distinguish clients’ profiles, whether millennials who have just generated liquidity or someone who has just lost a spouse. Looking at the climate in India, there’s a shift in interest from traditional banks to digital firms because of the custom solutions that digital firms offer. Traditional banks often depend on retrocession fees through third-party managers, yet these models are not the best for investment products and wealth management. The continuity factor is an important aspect to consider as clients prefer long-term commitment from their managers to their relationship.

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

Answer: Robo-advisors cannot replace the emotions and relationships that humans are capable of building and maintaining. In other words, greed and fear cannot be replicated in machines. Human advisors are needed to add value and specificity; just because the profiles measure favorable returns doesn’t mean they cannot do better. It’s important to consider that, as compared to an upward-facing market, clients appreciate personal advice more in volatile market situations.

Qn 3: What is your company doing to increase customer engagement and confidence in their financial institutions?

Answer: Given the ‘unnatural’ market conditions, there’s an expectation of being proactive in interactions. Since more clients can afford more time to review their holdings, they’d also expect managers to be available for discussions. However, frequent evaluations don’t always translate to confidence and results. As such, TrustPlutus recommends structured interactions like quarterly reviews of clients’ portfolios.

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