Fund Distribution in the FinTech Age

From the rise of robo-advising to the success of online investing, FinTech is making old ways of selling investment products obsolete and forcing the Asset and Wealth Management (AWM) industry to be more customer-centric. This is an opportunity for AWMs to strengthen investor and distributor relationships and become true solution providers.

Fund distribution in the FinTech age is not only about automated advice, but about providing customers with an end-to-end experience that combines digital with the right amount of personal relationship. It’s about achieving this ratio throughout the client journey, from how you prospect, through on-boarding, planning, advising, and monitoring. This journey defines client interaction and it is here that digitisation can make the difference.

No one-size-fits-all approach to prospecting

Investors and financial intermediaries are spending an increasing amount of time online, from social media to messaging apps. With over 3 billion active users of social media globally, AWMs have increased their social media presence in order to target new investors, with 89% of managers present in 2016, compared to only 60% in 2013. It is important to adapt to the specific channels of your target audience, be they online or offline, and understand their expectations. This can be through engaging with them through live video interviews, educating them, or helping them to better understand their financial situation and benchmark against their peers.

You snooze on-boarding, you lose

Key words when considering on-boarding are easy and fast. An innovative approach is required when on-boarding clients, as it will ensure that it’s smooth and seamless. Regulatory requirements however make it a more difficult process than simply registering on a website. In fact, according to our 2017 Global Fintech Survey (GFS), AML/KYC is seen by 52% of AWM respondents as a major barrier to innovation. Nonetheless, remote solutions are available to ensure the client is on-boarded in minimal time and effort on their part. Digital banks, for example, allow you to create a bank account in less than 5 minutes. Local regulatory requirements, according to country of distribution, will influence what can be used to expedite on-boarding, but the use of video-conferences is becoming accepted in an increasing number of countries.

Not "all automation, all the time"

Artificial Intelligence (AI) has the potential to expand and revolutionise Financial Services, but only 40% of consumers believe that AI will replace financial advisors. Highlighted in our GFS, the shift to digital experiences with human support was indicated as the third most important trend in the AWM industry. The hybridisation is designed to appeal to consumers who aren’t comfortable with pure-play robo investment.

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Dariush Yazdani

Grégory Weber

Xavier Domalain