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Use of Analytics in Wealth Management (Client Insights/Customer Retention…

- - - - How much is the risk if invested in a particular product?
    - - What are the returns when I invest in a particular product?
    - - What is the market now like?
- - - - End Results
        
        Develop deeper client relationships
        
        Perform accurate swegmentation
        
        Improve Advisor Productivity
        
        Deliver new business opportunities
  - - - http://www.wealthmanagement.com/high-net-worth/why-risk-management-belongs-your-client-s-portfolio
      - 4.Understand your customer
        
        Risk trends
        
        Criticsl risk areas
        
        Potential Quick Wins
    - - Shields wealth
      - Minimizes losses
      - Safeguards who can touch client assets
    - - Undestand your risk tolerance
        
        time frame?
        
        shorter time frame, lesser risk
        
        What can you afford to lose?
        
        Emotional ability to handle risk?
        
        Conservative portfolio or not?
      - Balancing Risk
        
        Types of risk
        
        Market risk
        
        not earning enough on own investments to keep up with inflation
        
        investments won’t grow enough to get to longer-term goals, such as retirement
      - Investing for long term
        
        diversifying
      - Not Too Much but Not Too Little, Either
  - - - divided into three parts
        
        ANALYSIS OF DATA SET AND
        CLIENT SEGMENTATION
        
        DATA AUDIT AND
        CLIENT DATA SET BUILD
        
        MODEL CREATION AND
        INTERVENTION DESIGN
      - measure client expectations precisely
        
        help client develop smart engagement programs
        to target the right clients
        
        to provide real-time analytics
        results using our big data analytics platform CAVII™
  - - - hit objective
      - deliver informatiobn in larger framework
    - - The better the partner understands the client’s unique challenges, the easier it becomes to frame communications in a positive light.
      - take the extra time to discover opportunities and solutions their clients would not see without them
    - - trust & transparency
  - - - Define a roadmap for wealth client data analytics maturity. This will identify gaps that can be addressed resulting in more relevant advisor-client interactions.
      - Establish a wealth client listening system across all channels. Early detection of client behaviors can lead to the identification of issues and sales opportunities.
      - Create a real-time single view of wealth client data with data virtualization. Substantial savings can be had by leaving disparate data in place while providing managers with a single view.
      - Establish an analytics driven financial advisor collaboration platform. This helps create market differentiation by maximizing advisor productivity, sharing best practices daily.
      - Deploy mobile virtual advisor video capability and establish branch analytics. This improves client experience and gives advisors more minutes per day with clients increasing cross-selling opportunities.
      - Empower advisors with real-time client insights to drive business outcomes. This helps the advisor manage to client life events with much greater granularity and speed.
- - - - What does this mean for wealth management firms?
        
        Page 4 Figure 2
        
        The Optimal Customer Acquisition Strategy?
        (In my opinion (based on my research))
        
        Robo-Advisers
        DBS's "Your Financial GPS"
        OCBC Robo-Adviser
        OCBC's Money In$ights
        5 Singapore Robo-Advisers
        
        Why?
        
        Fulfills many mentalities of the Re-wired Investor:
        
        5 more items...
        
        Little to no maintenance cost
        (as opposed to a fleet of human financial advisors)
        
        The hardest point of customer acquisition is trying to get the potential customer to first use the company's product/serivce, and Robo-Advisers provide a very easy and accessible "entry point" (e.g. free-to-use mobile app)
        
        1 more item...
      - A change in customer mindset and wants
      - Democratization of Asset Classes & Strategies
- - - - Helps to minimise losses
        
        Protects the wealth of clients
        
        Helps clients to be able to invest in a more suitable investments
        
        Helps financial advisors be able to recommend a more suitable investment to his client based on his risk tolerance
    - - Machine Learning
        
        Applied when the system learns about the financial products details such as the risk from historical data
        
        Natural-Language Processing
        
        Applied when the system parse through large volumes of unstructured data sources to identify probability in investment risks
        
        Predictive Analytics
        
        Applied to predict the probability and seriousness of a risk based on the historical financial details and the current financial market
  - - - Helps the financial advisor to assist client to invest efficiently & to provide advice
        
        Helps financial advisors to develop an effective strategy for long-term & short-term investments.
        
        Helps investors make better informed decisions.
    - - Machine Learning
        
        Applied when system learns the details of the financial product, such as the trends of the different product’s profit, value and returns over the years.
        
        Natural Language Processing
        
        Applied when tools parse through volumes of unstructured data sources—such as news reports, blogs, and social media—to identify potential investment trends.
        
        Predictive Analytics
        
        Applied to predict the probability of a risk of a financial product based on the financial market and also of the company’s financial wealth.