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Hyper personalisation as a wealth builder within financial advice

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Hyper-personalisation is no longer the preserve of high-profile companies like Facebook, Amazon and the banks. Advice firms who harness their client data to drive hyper-personalisation can create better customer experiences, greater customer satisfaction, increased customer retention and boost revenues, argues Ross Laurie, CEO, Visible Capital. You bought the John le Carré novel, so you might also like Ian Rankine’s latest. You bought a table tennis bat; do you want to change that to the bundle with a pack of balls and a handy carry case thrown in? The chances are that you do and that you appreciate Amazon’s insightful suggestion. According to Deloitte’s Connecting with Meaning research, 90% of customers find personalised advertising appealing.

Indeed, many satisfying consumer retail experiences now rely heavily on an expectation that the retailer will predict our needs and wants.

It’s highly effective marketing, driven by the use of data, analytics, AI and automation. This marketing approach has been round for decades but its increasing pervasiveness and sophistication has earned it the newly-minted descriptor ‘hyper-personalisation’. Whilst it’s certainly gaining traction in on-line shopping baskets and home entertainment (Netflix), it’s also being rolled out in the world of banking and finance too. Banks have extraordinary resources of customer data and are beginning to use it to hone their products and direct customers at various levels of engagement.

The wealth management sector is also ideally positioned to transform its effectiveness by a swift and creative investment in hyper-personalisation.

Hyper-personalisation is really all about managing customer data. We’ve heard before that data is the new gold and just because it’s a cliché, doesn’t mean it’s not true.

We are in the middle of an exciting data rush and the data prospectors out there who are able to sift out the nuggets of customer information that signal who they are, how they spend their money now and how they could spend it in th uture, are going to be the winners in any market, including financial advice.

Adviser firms that capture and categorise data and then use it to unlock customer insights will get ahead. Sophisticated customer insights means being able to anticipate customers needs and wants in a similar way to Amazon and Netflix. And that means better customer experiences, greater customer satisfaction, increased customer retention and burgeoning sales.

Data analysis not only allows firms to tailor products and investment approaches to individual clients but also to creation of valuable insights into customer behaviours and personas, which can be especially useful at regional and business wide levels.

And it doesn’t mean hours of work for advice firms. Engaging with technology partners utilising automation and AI can help collection and categorisation of data to quickly deploy the benefits of hyper-personalisation. Think every client being able to quickly complete a fact fund, with automated downloading and categorisaion of their asset information from source, as an example, then sharing their data with their adviser to help see their income steams, their outgoings (and where savings might be made, and their current provision for retirement (and where those can be improved), to make their money work harder and maximise their wealth. Imagine how this level of personalised wealth management could improve the quality of advice given and appeal to clients.

Innovation in the wealth sector tends to happen in the same way as in other sectors – you get:

  • Innovators (2.5%)
  • Early adopters (13.5%)
  • Early majority (34%)
  • Late majority (34%)
  • and Laggards (16%)

Alongside, improved fact find and suitability, hyper-personalisation as an innovating force is an opportunity to transform data into sales and there are clearly some advice firms leading the way as early adopters, closely followed by some early majority firms who are progressing with the first phase of personalisation by collating highly accurate, enriched data sets o act as a foundation on which to build current and future technologies.

The advice firms in the categories of early adopters and early majority are the ones that will flourish. Prioritising the mining of data to create customer insights and ultimately drive sales must be at the heart of advice firms’ digital and marketing strategies.

It makes good sense for short- and medium-term profitability but also creates considerable value to an advice firm’s side of any acquisition deal. On average, firms which are harnessing their data and tech effectively are able to command fixed multiples of between 6.5 to 8 times profit, compared to a fixed multiple of around 5 times profit for companies who have not invested in managing their data assets.

Therefore, the question for all advice firms is: Are you making best use of your data? If not, why not because the technology is in the market to help you do so?

Full article here:

by Ross Laurie CEO, Visible Capital

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