August 15, 2018

The end of the Wise-Old-Wealth-Manager

Sameer Datye

Head of Business Development Insurance and Wealth management, Tieto

The days of the “wise-old-wealth-manager(advisor)” whose advise was the only window into wealth planning from the smallest insurance policies to the major decisions around investments related to pensions, equities and even real-estate - are pass. Such a role and all its adjectives are fast becoming obsolete and irrelevant.

1. “Wise” is overrated

“Wisdom” is no longer is the haloed domain of the special few. Data points for decision making and the ability to recommend actions is rapidly becoming automated and primarily driven by the technology accelerators like AI, Machine Learning, robotics etc.

2. “Old” is not gold

The “Young AI” is easily able to recommend and execute actions by crunching stupendous amounts of data from the past and running probable simulations of the future. Age symbolizing smartness and experience is neither believable nor saleable.

3. “Wealth” without limits 

Intrinsic value alone doesn’t define wealth anymore. Wealth is not just movable and immovable assets any more. The new dimensions are - tangible and intangible. Assets could mean anything- cryptocurrencies, shares in a painting hanging in a gallery in London, a special wine bottle, the effort invested in creating assets in an online game, etc.

4. Self Service - not “Manager”

Consumer behavior seems to be moving towards assisted or independent self-service with a goal-oriented approach and gamification possibilities for wealth and finance management. Be it while commuting to work or while vacationing on the beach, the advisory should be accessible on the device of my choice (read mobility). The human advisory role is changing and will need to adapt to the utility of being a “friendly guide and IT support”, relationship coordinator, logistic support etc.

Surprising this paradigm shift doesn’t seem to be limited to the millennials or the post millennials as it often discussed. This seems to be a behavioral change across generations (with varying degrees of course)!

The financial services industry will need to reconsider how to engage with their consumers. New reasons as well as avenues of engagement need to be explored. There is a need for "exploration" because there are is no single de-facto alternative to the Wise-Old-Wealth-Manager. Many and diverse options need to be tried in order to accommodate both- the churn of technology disruptors and the rapidly changing consumer behavior.

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