Building the “my” system
Claudius Sutter is the Global Head of Offering Management & Advice Process Management in UBS Wealth Management. In addition, he is responsible for UBS SmartWealth.

Of all the areas of the financial industry dealing with digital transformation, wealth management has perhaps been the most ambivalent.

Some believe wealth management services can be fully digitalized and automated through so-called robo-advisors. Others maintain such a highly personal, client-centric business must remain predominantly human.

We will have to wait and see which way the industry ultimately turns. But thanks to my recent work developing the new UBS SmartWealth digital platform, I have come to believe the answer lies somewhere in the middle.

Wealth management will always be a human discipline. But in building UBS SmartWealth we saw how digitalization can bring new perspectives to the client experience – perspectives that can be very compelling, and which we are only beginning to understand.

A more systematic and consistent experience

UBS SmartWealth is a digitally based total wealth platform in which clients input their financial situation, risk preferences and long-term goals and receive relevant investment options. Although clients interact only with the machine, we don’t consider UBS SmartWealth a robo-advisor in the traditional sense. That’s among other things because the investment strategy definition is not driven by algorithms but by UBS’s broad-based, very human investment process (see box).

That said, we discovered that the digital element can enhance the advisory process in many ways. Among them:

  • Systematization. A digitally based system can easily sift through the thousands of products and services a typical bank has on offer, incorporate the latest updates and market data, and find the right fit for each individual client.
  • Consistency. A digitally based system will always provide similar output under similar circumstances, increasing consistency of advice and thus a consistently positive client experience.
  • Transparency. Because we build them, we understand – and can explain – how digitally-based systems make their decisions. That makes them highly transparent.
  • Clarity. Digital platforms can provide powerful tools to help clients visualize their situation, options, and future scenarios. That can help them better understand their portfolios and markets as well as potentially better judge risk and their own tolerance for it.
  • Safety. Digital platforms can have regulatory rules “baked in”, ensuring advice is always compliant and products suitable. They can monitor portfolios and markets 24/7 and proactively alert clients if problems arise. They can automatically trigger reviews should the client’s situation change – either because he or she inputs new information, or there is a significant event like a large deposit or withdrawal.

“My” system

While these digitally enabled traits are all very desirable, the question remains if an online platform can provide a truly satisfying experience to wealth management clients. I believe it can.

Wealth management advisory works best when the client provides the advisor with as much personal detail as possible. Digital platforms allow clients to input this information at will – not just during the periodic meetings with the advisor. If the client trusts the confidentiality of the system, he or she may very well be inclined to divulge more information to it than to a human advisor.

Similarly, a system which constantly reviews the portfolio and provides updates and alerts can give clients a strong assurance of being paid attention to. If clients find the platform useful, they may begin to view it not as the bank’s system, but as “my” private tool. That can make for a very personal experience. To be effective, however, this personal aspect must be designed into the platform from the beginning, as we have tried to do with UBS SmartWealth.

I envision a world where clients and advisors share access to digital capabilities for different purposes to ultimately achieve better outcomes. This is where I believe digitalization has much untapped potential in the human world of wealth management. And where, very likely, the future of digitalization in wealth management is to be found.

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