Advisor | February 2022

A record-filled 2021 has passed, and the industry of financial consultancy is wondering what challenges lay ahead.

There are two central issues with different degrees of intensity.

The first issue is the passage from financial consultancy to financial planning. This includes material and non-material assets, as well as the necessities connected to the management of liquidity, protection, and access to credit.

The passage from financial consultancy to financial planning has been on the agendas of all financial networks for quite some time. Depending on the economies of scales, financial networks address the issue by outsourcing or insourcing resources and skills complementary to financial consultancy.

The second and perhaps most challenging issue is the widening of the customer base by increasing the number of clients, mainly from the affluent segment. Today, a large majority of the over four million clients assisted by financial advisors are private clients (45%).

In Italy, the bulk of savings and liquidity on checking accounts belongs to the mass and upper affluent segment, that is people with an average annual balance worth about 200.000€. Today, only 12% of them are assisted by networks of financial advisors.

The figures are remarkable: the affluent segment owns double the assets than the private segment (€1.000 billion for about five million clients).

In order to widen the customer base, networks of financial advisors should, on the one hand, identify the professionals most open to investing on less wealthy clients; on the other hand, networks should provide them with digital and adjustable tools and consultancy services (including advanced consultancy).

This would allow clients to have an optimal multi-channel customer experience and give financial professionals optimal time management.

Today, the mass and upper affluent segment relies mainly on traditional banks, which however lack oxygen when it comes to diving into the sea of digital services.

For some time now, a few financial networks (generally, those with a high number of clients, assets under management and a level of digitalization above average) have been assisting affluent clients, but mainly as online banks.

However, being a good online bank is not enough: winning models are able to modulate the intensity of advanced consultancy, keeping the combination digital-consultant at the forefront and adapting the mix to the type of client, the entity of their assets and his/her time horizon.

Today, banks that invest in digital tools and, at the same time, in training for their employees, can adopt the most advanced models of private banking while serving clients with more basic needs.

It is like using the same platform for different kinds of car, while the engine, the number of warning lights and, in our case, the pilot and his/her race strategy change.

The car manufacturer, the engineers and the mechanics can remain the same, provided that they focus on the pilot, allowing him/her to suggest different experiences to different clients, to move into low gear, to get to the finish line first.

The alternative is not the autopilot, today associated to the risk of going off-road or, in the best scenario, of being overtaken by anyone, including traditional banks.

Nicola Ronchetti