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U.S. financial firms looking to robo-technology to complement existing service models


January 25, 2017   by Canadian Underwriter


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Robo-technology is expected to be part of the mix for most polled U.S. financial firms looking to enhance their existing service models, suggest a new survey from Vestmark, Inc.

Feedback was captured during a webinar last month attended by 150 asset managers, consultants, broker dealers, registered investment managers and other financial firms, and hosted by Vestmark, a provider of unified wealth management solutions.

Poll findings indicate almost half of participating firms have “consolidated their advisory platforms and consider robo-technology as a complement to their existing service model in light of shifting regulation and evolving investor demands,” the company reports in a statement Wednesday.

Related: Seven of 10 global consumers would welcome robo-advice for banking, insurance and retirement services: Accenture

The webinar explored the need for automated advice platforms in light of the U.S. Department of Labor’s (DoL) conflict of interest rule. Vestmark advises firms to remain focused on redefining their operations to ensure a positive investor experience and streamline compliance with the impending regulation.

Highlights of the participant feedback include the following:

  • 51% of respondents report they have already consolidated their firm’s advisory programs;
  • 89% believe the emergence of robo-advisors will have an impact on their firm; and
  • 70% say they feel their firm is embracing robo-technology as a complement to their existing service model.

As the proliferation of robo-solutions grows, Vestmark reports, the wealth management industry “is shifting towards digitally augmented advice or the combination of traditional advice delivered by a financial advisor with a flexible suite of digital capabilities.”

Whatever their form, “these digital advice solutions possess a range of operational implications, leading firms to rethink their business model and consider consolidating their platforms,” the statement emphasizes.

Related: 80% of the small-medium business market in the U.S. “significantly underserved” by insurers: Majesco

“Wealth managers realize they need to adapt their business models in order to remain competitive and survive in the age of robo-solutions,” Vestmark president Rob Klapprodt maintains.

“Blending their core competencies with new tools and technology as they embrace the robo trend yields more consistent advice, improves operating efficiency, and minimizes risk using a consolidated platform,” Vestmark says.

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