Hybrid advice represents the future of financial services

“Technology and market forces are driving developments in the financial advice market. Next-generation advisers will benefit from more advanced and beneficial technology, which will enhance both the client experience and business operations.

According to global consultancy  Alpha FMC, strong macro tailwinds to promote saving and investing, such as government policy, will help increase assets across UK financial services by £1trn to £2.9trn by 2025, c80% of it expected to be advised*. This burgeoning market will open new opportunities – but also generate greater competition.

Those new opportunities can be tapped into using what is known as ‘hybrid advice’. Wealth Wizards proposes using "hybrid advice," which we divide into two parts for greater clarity. Consumer-led advice is 100% automated or 'codified,' while human-assisted advice is a combination of codified and human-based advice.

Consumers want easily accessible financial support to better understand their financial situations and improve their financial well-being, whether that’s digital personalised guidance, digital advice with some human oversight or face to face advice.

Advice firms want a way to lower their costs per client, increase the number of profitable clients for each adviser, and find a way to access the expected £1 trillion and more that will enter the market in the upcoming years. In order to achieve these goals, they need a way to serve lower-value clients profitably.

Consumer-led and human-assisted advice can accomplish all of this. Consumer-led guidance and advice offer a personalised digital journey which serves both lower and higher-value clients. Consumers can receive 100% codified advice, fully aligned with the firm's advice policy, or an introduction to the human-assisted element, an adviser, for partial or fully-fledged advice, depending on their financial needs.

Consumer-led advice can reduce costs per client by utilising machine learning and automation to remove the 'heavy lifting' from the advice process, which allows advisers to serve more clients. Firms can bring on new lower-value clients profitably, with little or no intervention from an adviser, by using consumer-led and human-assisted advice while still providing quality service to traditional HNW clients.

Consumer-led and human-assisted advice is expected to increase competition in the market, with banks and building societies recognising its potential to provide digital advice to their lower-value customer base while also attracting higher-value customers to their advice stream. Additionally, digital guidance and advice are being deployed by pension companies and life assurers to engage with consumers and assist them with retirement planning.

Consumer-led and human-assisted advice represents the future of financial services. By adopting this innovative approach, the industry can achieve greater efficiency, profitability and cost-effectiveness while delivering better outcomes and promoting financial well-being across the UK. With the technology already available, visionary advice firms are leading the way in embracing this revolutionary model. As a pioneer in this field, Wealth Wizards confidently predicts that consumer-led and human-assisted advice services will soon become the gold standard for all large and progressive financial advice firms”

‍To discuss how Wealth Wizards unique solution can benefit your business email: Nick.Hall@WealthWizards.com

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*Retail &Distribution Practice – Financial Advice Overview (Alpha FMC 2022).

Article updated: 02/05/2023