Automation and the dangers of one size fits all

By Dave Chessell

Go to the profile of PortfolioMetrix
Nov 11, 2019
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“Stack them high, sell them cheap” was the business philosophy of Jack Cohen, the founder of Tesco and it certainly served him well. These days, making a success of a business is a little more complicated. Even the likes of Tesco have had to adapt and adopt new strategies to keep their customers happy. Premium ranges sit alongside the budget ones and deli, fish, meat and even cooked food counters are there to ensure the store stays relevant for all customers and their individual needs.

Staying ahead of the business curve has never been more challenging and an article in Professional Adviser by Ben Goss, the CEO of Dynamic Planner, caught my eye last week. He set out the ‘Three ‘mega-trends’ set to power financial advice forward’. I can’t argue with any of this thinking and his third trend – the digitisation of personal service – certainly hit home.

Automation v customisation

As Ben says in his article, technology is training consumers globally to expect personalised services based on their data. Just as Tesco uses technology to monitor the individual buying habits of its Clubcard members, allowing it to tailor services and offers to meet their needs, today’s consumers are also experiencing tailored services from all sorts of service providers.

So, what does this mean for financial advisers? Many would say they have been providing tailored and personal services for years. While that is certainly true for many, there is an increasing need to see more clients within the framework of the working week. Technology is a key to doing this, as many advisers are discovering.

In the race for efficiency though, how do we avoid automating services to such an extent that clients end up receiving a less tailored experience then they might expect?

Regulation is driving segmentation

The Product Intervention and Product Governance Sourcebook (PROD) recognises this danger and is designed to encourage advisers to segment clients so the investment service they are offered can better fit their needs. That’s all well and good, but the challenge this presents in terms of the time spent by advisers to deliver it is something the industry is grappling with.

Nine years ago, a group of forward-looking financial services experts recognised that advisers needed technology that would deliver a customised service, but that was scalable to cope with multiple clients. This is the team that set up PortfolioMetrix and it has been providing individualised, yet scalable investment services ever since (alongside a range of other services designed to give advisers the tools they need to run their businesses in the way they decide is best for them).

Hard work and tenacity have turned PortfolioMetrix into the multi-award-winning business that it is today, and, for all this time, we have been the only firm offering a truly customised portfolio service that can be delivered by advisers to their clients in large numbers.

But that’s about to change.

One of the big brands has finally woken up to the real needs of advisers and their clients and is launching a “mass customisation” service – a phrase we don’t particularly like, but which seems to be gaining traction. (For us, there is nothing “mass” about an individualised portfolio, only efficiency to be gained in how it is created and managed).

We feel sure this won’t be the only competition we’ll face, but we have confidence that our long track record and independence, which allow us to be flexible and adapt to our adviser partners’ needs, will see us continue to grow our client base.

In fact, we think it’s good news that other firms will be putting marketing budgets behind promoting the benefits of customisation at scale – or mass customisation if you will. The more advisers that recognise the benefits and what it can support in their own practices, the more opportunities there will be for the firms who can deliver it as it should be.

 

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PortfolioMetrix

PortfolioMetrix are a multi-award winning, innovative investment manager that provides independent financial advisers with an alternative way to access discretionary investment management for their clients. Our proposition comes at a competitive price and doesn’t compromise the adviser/client relationship. The London winner of the Citywire Wealth Manager Regional Stars award for two consecutive years, voted the WM Small Business of the year, in association with ARC 2018 and, in 2019, have received the accolade of PA Discretionary Manager of the Year. Our proposition offers the convenience of online model portfolios yet delivers customised portfolios, tailored to individual client requirements. Investment performance has demonstrated consistent and reliable risk and return separation of portfolios that doesn’t undermine the financial planning process. This is achieved through our academically-robust, risk-based investment approach. WealthExplorer™ is integral to the PortfolioMetrix customised service. A proprietary owned and designed software system, WealthExplorer™, is purpose built to equip advisers with a broad range of tools designed to deliver unique client insights that add value to the adviser/client relationship and ultimately delivers better client outcomes, when utilised by financial advisers.

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