A Wealth Manager can set the highest standards in protecting advisory customers and significantly enhance a positive customer experience at the same time. If well implemented, a regulatory requirement can be turned into a business opportunity.
Tighter investor protection rules require firms distributing financial instruments and providing advice to establish a risk and control framework that meets certain obligations. These obligations include ex ante appropriateness tests and ex post duties to check whether the advice and the product function as intended. Additionally, financial service providers will also have to clarify how they charge for their services and how they deliver these services on an ongoing basis in practice. Amongst other things, most Wealth Management firms established an investment office with a house view and made this view the guiding principle upon which they provide advisory services. And ultimately, the advisory business will be put under a contractual framework.
For economic as well as for compliance reasons, many financial service providers limit their advisory offering. Or, they suspend it altogether and focus on discretionary mandates. Such an approach towards regulation cuts back growth potential and takes away an opportunity to stand out.
Also, it is an undisputed fact that the Wealth Management industry runs on trust. A precious commodity that does not need constant mentioning but rather is confirmed by every touch point between the partners. This is particularly important when one of the partners is not an expert – as is the case with most touch points between Wealth Managers and their customers. Cultivating these touch points consistently across the entire organization becomes key.
We developed the processes and the governance for the Distinga Advisory business approach. The situation caused by COVID-19 and the implementation of the Swiss Financial Services Act emphasize the need to support personal interactions with digital solutions. In fact, firms who excel in cultivating all touch points – including digital ones – consistently, now have the opportunity to really differentiate themselves and unlock new growth opportunities.
For a smooth implementation of the Distinga Advisory business approach, we work hand in hand with Prometeia – a leading software solutions and data provider specializing in the digitalization, automation and compliance of advisory services. Prometeia was founded in 1974 as an independent institute for economic research by a group of university professors in Bologna. Most recently, a report by Forrester Research Inc. confirmed Prometeia as a leader in Digital Wealth Management Platforms.
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