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Unlocking the potential:

Are you ready to help your clients take control of their financial future?

Thanks to the EU Retail Investment Strategy that will put the retail investor back at the core of the European Capital Markets Union, digital advice is set to revolutionize the landscape by democratizing access to financial advice and investment opportunities. However, a key challenge lies in building trust with clients while acknowledging the investor’s emotions. In this post, we delve into the potential of these new digital advice platforms, their ability to provide personalized recommendations, and the crucial role of transparency in fostering trust.

#1: Democratizing access:
Personalized recommendations for all

Digital advice platforms will leverage algorithms to deliver personalized investment recommendations, making it possible for investors of all income levels to make more informed decisions.

By accounting for individual circumstances and investment objectives, these platforms ensure that recommendations are suitable and tailored to every client.

#2 Building trust:
Transparency is key

While digital advice platforms hold immense potential, building trust with investors is paramount. Many individuals remain skeptical of algorithms and may prefer the traditional route of working with human advisors.

To bridge this gap, digital advice platforms must demonstrate transparency, explainability, and reliability in the algorithms. Clients need assurance that the recommendations are based on sound principles and produce consistent outcomes. By establishing trust through transparency, these platforms can create long-lasting relationships with their clients.

#3 Understand your customer:
Investing remains an emotional process

Digital advice platforms can ensure that their recommendations are suitable for the client’s needs and preferences by taking into account the client’s individual circumstances, investment objectives, and emotions. Behavioral profiling is the preferred method for digital advice platforms to capture, collect and use data on the client’s risk and loss tolerance, investment goals, and other factors that may influence their investment decisions while boosting (digital) investor conversion.

#4 Striking the Right Balance:
Blending technology and human touch

As the retail investment landscape evolves, digital advice platforms hold immense potential for both investors and the financial industry to bridge the gap in accessibility and streamline the investment process.

Recognizing that some investors crave personal interaction, digital advice platforms can strike a balance between technology and the human touch. This hybrid approach ensures that investors have the best of both worlds—access to cutting-edge technology and the comfort of human expertise.

While algorithms increasingly form the backbone of these platforms, human advisors can complement the process by providing additional guidance, support, and reassurance. But even there, behavioral profiling will also give the advisor a head-start by anticipating their clients’ true behavior well-before turmoil hits the markets.

In short, by providing personalized recommendations, acknowledging emotions, leveraging algorithms, and demonstrating transparency, these platforms will transform the way individuals make investment decisions. As trust is built and technology continues to evolve, the potential to reshape the retail investment landscape is immense. A new opportunity to get everyone invested.

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