10 connected strategy for asian wealth management ^Top exchange (FX) and options. However, beyond simple digital marketing, the use of clickstream data to better understand clients, remains low. • For advice seeking investors, a human advisor drives most steps of the journey from client engagement, needs identification, generation of advice, delivery of advice, trade execution to post-purchase product and portfolio monitoring. There are few scale economies in this model, which is economically viable only for high-value clients where the value of the wealth transaction and relationship exceed the advisor’s cost to engage and personalize at each step. But since repeating the cycle is people reliant, the model does not scale beyond a limited number of clients per advisor. • The advisor plays an important role in helping clients build wealth Multiple studies have found that advisors add value to their clients. For example, the Vanguard Group’s Advisor’s alpha framework c.2001, and repeated in 2016, found that advisors add “about 3%” net of taxes and fees10. The added value is generated by focusing on relationship-oriented services such as financial planning and behavioral coaching and not from trying to beat the market with investment product selection. Similar research in Canada11 also arrived at a similar conclusion concerning the importance of financial advice in helping clients grow their level of affluence and that “employing the services of a financial advisor could significantly boost retirement readiness” for both early and late savers. • The advisor’s data-driven client insight is limited for most of their clients. This is due to several reasons: the advisor’s limited time and incentives, which tend to be focused on quarterly sales. Clients also tend not to disclose all data to an advisor till a trust-based relationship is built, which takes time. In the non-HNW segments, each advisor manages several hundred clients and cannot maintain granular, on- going client insight. And relationships are often in flux with double-digit advisor attrition12. • While human advisors add value for clients, advisors are “error prone and incon- sistent”. A recent research study by a behavioral science firm13 found that for the same profile of clients, different advisors give quite different judgments on how much investment risk would be suitable, what allocation would be optimal (even 10 “Quantifying your value to your clients”, Vanguard Advisor’s Alpha, 2016 11 “Saving for the Future: Impacts of Financial Advice on the Canadian Economy”, The Conference Board of Canada, 2020 12 Relationship Manager attrition in Asia is c.20-25% 13 “Under the Microscope: ‘Noise’ and investment advice”, Oxford Risk, 2021