For years, financial institutions have sought ways to make true financial advice available online. But did they find a way to satisfy their more independent customers?
We will talk about the ways in which digital technology is transforming the way we market (and receive) financial advisory services. Take a peek at projects from our research labs.
One features a room designed in a joint effort with the University of Applied Sciences in Darmstadt, Germany: It provides a digitally enhanced advisor-client conversation, using a multitouch table and a screen wall.
The other is seeking to grant investors more control in a more integrated process by creating a platform for both, advisors and investors.
Will digital technologies – one day – create the category killer for personal financial advising or take it to the next level.
2. What we are going to talk about
Three different models for
financial advisory
! My financial advisor has an
algorithm
! My algorithm has some
financial advisors
! My financial advisor is an
algorithm
5. Whom do you trust in financial matters?
Source: Million Dollar Round Table, Financial Harmony Study 2011
6. Whom do they trust in financial matters?
Source: Million Dollar Round Table, Financial Harmony Study 2011
7. Democratization of Information
We became our own travel
agents, insurance brokers, now
we are learning to use our cell WHY DO WE STILL
phones to triage our own bodies.
NEED FINANCIAL
ADVISORS?
47. ! I am social.
! I‘m used to information and
interaction online.
MY ALGORITHM HAS
SOME FINANCIAL
ADVISORS
48. Advice is collaboration.
! I can learn about investing
A COMMUNITY OF ! I manage my plan
! I get input from family, friends
and financial professionals.
FINANCIAL ADVICE
49. Advice is collaboration
Investment
Goals and
decisions
finances
Financial
advisors Spouse
Tax advice
College
savings
Accountant Estate
planning
Children
Attorney
50. Advice is collaboration
Pete Smith: Jim, I’ve just taken my first job with
a 401(k) plan. I’ve shared my retirement plan
Pete’s career with you. I know you understand this stuff. Can
Pete’s retirement
you have a look?
Pete’s 401(k)
2012 2022 2032 2042 2052 2062
51. Advice is collaboration
Pete Smith: Jim, I’ve just taken my first job with
a 401(k) plan. I’ve shared my retirement plan
Pete’s career with you. I know you understand this stuff. Can
Pete’s retirement
you have a look?
Jim Smith [Brother]: You’re doing the right thing
Pete’s 401(k) by starting to save now. Make sure you find out
about the other investment options in your plan,
though. Right now, your contributions are going
Robbie’s college
into a money fund. Also, you should think about
saving for Robbie’s college education, too.
2012 2022 2032 2042 2052 2062
52. Advice is collaboration
Pete Smith: Jim, I’ve just taken my first job with
a 401(k) plan. I’ve shared my retirement plan
Pete’s career with you. I know you understand this stuff. Can
Pete’s retirement
you have a look?
Jim Smith [Brother]: You’re doing the right thing
Pete’s 401(k) by starting to save now. Make sure you find out
about the other investment options in your plan,
though. Right now, your contributions are going
Robbie’s college
into a money fund. You should think about 529s
for Robbie’s college education, too.
Pete Smith: Where can I find out about that?
Jim Smith [Brother]: My broker,
@George.Jones, set up the accounts for my
kids. Friend him and he can tell you how it works.
2012 2022 2032 2042 2052 2062
53. Advice is collaboration
Pete Smith: Hi, George. My brother Jim said you
might be able to help me with investments for my
Pete’s career son Robbie’s college.
Pete’s retirement
Pete’s 401(k)
Robbie’s college
2012 2022 2032 2042 2052 2062
54. Advice is collaboration
Pete Smith: Hi, George. My brother Jim said you
might be able to help me with investments for my
Pete’s career son Robbie’s college.
Pete’s retirement George Jones [Advisor]: Happy to help. You
should consider your state’s 529 plan so your
Pete’s 401(k) contributions will be tax-deductible. Start saving
$200 each month, and you can increase it with
your raise next year.
Robbie’s college
Robbie’s 529
2012 2022 2032 2042 2052 2062
55. Advice is collaboration
Pete Smith: Hi, George. My brother Jim said you
might be able to help me with investments for my
Pete’s career son Robbie’s college.
Pete’s retirement George Jones [Advisor]: Happy to help. You
should consider your state’s 529 plan so your
Pete’s 401(k) contributions will be tax-deductible. Start saving
$200 each month, and you can increase it with
your raise next year.
Robbie’s college
George Jones [Advisor]: Since your son will be
Robbie’s 529 entering college in 16 years, I recommend a
growth-oriented approach, with a fixed income
fund for balance.
2012 2022 2032 2042 2052 2062
56. Advice is collaboration
Pete Smith: Hi, George. My brother Jim said you
might be able to help me with investments for my
Pete’s career son Robbie’s college.
Pete’s retirement George Jones [Advisor]: Happy to help. You
should consider your state’s 529 plan so your
Pete’s 401(k) contributions will be tax-deductible. Start saving
$200 each month, and you can increase it with
your raise next year.
Robbie’s college
George Jones [Advisor]: Since your son will be
Robbie’s 529 entering college in 16 years, I recommend a
growth-oriented approach, with a fixed income
fund for balance.
Pete Smith: That looks great. How do I get
2012 2022 2032 2042 2052 2062
started?
George Jones [Advisor]: You can open an
account online at http://www.myState529Plan.org.!
57. Engagement is value for the advisor.
! I know right away when my
SOCIAL FINANCE client’s plans change.
! I see their whole financial
picture.
OPTIMIZES ADVICE ! I have many more
opportunities to bring value to
the relationship.
59. ! I am mobile and social.
! I accept my data being
collected and used if it serves
MY FINANCIAL
me.
! I have no time or motivation to
become an expert in investing.
ADVISOR IS AN
ALGORITHM
62. Advice is based on data.
! I don’t want to learn about
AN AUTOMATIC investing.
! I don’t have time to manage
my plan.
FINANCIAL ADVISOR ! I trust the Algovisor that knows
more about me than any
financial advisor ever would.
63. “Because investing is very individual and personal”
The advisor needs to know my
life, my goals, my finances.
SO MANY
ALGORITHMS
ALREADY DO
66. The Algovisor uses MY interface
Sylke, you cancelled Great. I sent them to the
your trip to Australia. I Algovisor App, along with
am going to move the some details about the
funds we set aside for individual funds.
that into your xyz
account. Okay?
Yes
OK
I will allocate the funds
according to our current
portfolio model. Do you
want to review the trades
I am proposing before I
buy?
Sure
67. Thank you for coming
#SXALGOVISOR
! Download slides
www.mediaman.net/algovisor
! Contact
Sylke.Laine@mediaman.net