Best of both worlds: Banks combine digital and in-person advising

The rise of robo-advisors and automatic investment platforms is creating a lot of buzz lately. The convenience, accessibility, and low price that these digital services offer are opening the doors for a much broader socioeconomic group of investors to get involved in the market. However, taking away the human element of investing can make the process a lot less personalized, which is a crucial part of planning for one’s financial future. One of the biggest factors driving the popularity of a digital approach to investing is the mass acceptance of technology and the influence that the explosion of mobile devices has had on everyday consumer behavior. Owning one or more mobile devices such as smartphones or tablets has become the norm; Mintel’s Mobile Phones US 2015 report shows that three quarters of US adults own at least one smartphone.

As the preference for digital connectedness creeps into all aspects of the day-to-day customer journey, traditional banks need to pay extra attention to their mass affluent clients. How can they keep them engaged before they have a chance to jump ship in favor of a more DIY approach? This is a valid concern. According to a recent study by McKinsey, “40 to 45 percent of affluent US consumers who switched their primary wealth management firm in the past 24 months moved to a direct, digitally-led firm — in many cases choosing to work with a phone-based advisor at those firms.”

49% of US wealthy women take charge of making the financial decisions in their household

Additionally, the traditional make-up of the mass affluent consumer is changing. We are beginning to see a significant shift in the roles that men and women play within the family unit, especially when it comes to finances. According to Mintel’s High Net Worth Women US 2014 report, half of wealthy women take charge of making the financial decisions in their household. This same report also found that while the majority of wealthy women prefer to interact one-on-one with an advisor for financial tools, advice, and the latest investment news, they also prefer to receive financial educational information online.

The key to reaching these wealthier consumers is going to be finding a sweet spot between a digitally-led approach and the personalized interaction that you can only get from a dedicated financial advisor. Some banks are already taking that next step. CIBC in Canada recently launched a new digital advice channel for their wealthier customers. Using the existing platform, CIBC is allowing its mass affluent client base to choose from over 60 remote financial advisors who are available for personalized consult by phone or email.

SunTrust Bank is also paving the way by digitally engaging with its mass affluent client base through its online platform, SummitView®. This financial planning tool, developed in conjunction with eMoney, allows customers to view and manage their financial accounts similar to Mint.com, but with a few added twists. The tool also lets users put their financial plans through a “stress test” to see how various scenarios will affect the future outcome. Plus there’s an online “vault” where clients can store important documents like wills or trusts. But this is not a digital-only approach. SunTrust is expecting clients to use this online tool in collaboration with a dedicated financial advisor. This allows all of their bankers, advisors, and wealth managers the ability to connect with clients either in the branch, in their homes, or over the phone without the hassle of needing to hand over endless amounts of paper or statements.

Vanguard is another example of a traditional bank taking a more integrated approach. The recently introduced Vanguard Personal Advisor Services offers robo-allocations as a starter level for investors, but also provides a human advisor as a premium option.

In a world of diminishing bank branches and an “I want everything and I want it now” consumer mentality, traditional banks are going to have to work a little harder to keep their customers engaged. An integrated offering with both a digital component or the availability of virtual advice is going to have mass appeal for those digitally-savvy, affluent investors, while a dedicated professional provides personalization and a sense of familiarity.

Lily Harder is the Vice President of Research for Mintel Comperemedia. Lily specializes in the financial services industry, researching and presenting on the latest industry trends, competitive intelligence insights and newsworthy developments.