Financial Advisers: Why You Should Know Your Clients Better Than They Know Themselves

Financial Advisers: Why You Should Know Your Clients Better Than They Know Themselves

Written by: Carol Pockington

A recent visit to my bank manager highlighted the need for me to open an account with a higher % interest rate. Just one catch (as far as I could see) I couldn’t access these funds via an ATM; however if I needed to transfer money from the new account to my account attached to the ATM I could do so by downloading an App onto my cell. As explained to me, I would then be able to use this App to transfer funds from one account to another ‘even while standing in line at the ATM’.

I was somewhat skeptical to say the least and visualized lines behind me at the ATM becoming frustrated as I tried to move funds from my high interest account to my ATM account. But in reality it took no time at all; nobody was held up in a line; I transferred funds from one account to another using my cell, withdrew my cash and went on my way.

The moral of this story for financial advisers – know your clients better than they know themselves. 

Bree McDonough as part of the FSC Deloitte Future Leaders Program writes in the following article titled The Digital Revolution of Wealth Management:

Evident from changes in legislation, technology and customer expectations the traditional wealth management model is not sustainable to service today and tomorrows connected customers. The Australian wealth management industry is urged to invest in building their digital intelligence and implementing a connect customer centric business model.

It is recommended that the industry implements the strategic enablers explored in this paper to increase digital intelligence and re‐engineer their businesses around today’s connected customer:

Know your customers better than they know themselves

  1. Redefine service and value
  2. Plan for the future and remove barriers.
  3. By implementing these strategic enablers, the wealth management industry can leverage the digital revolution to build sustainable and valuable relationships, build trust and a deeper customer understanding. Successful businesses will counter disruption by constantly evaluating their business model and position themselves with a strategic advantage. The longer the industry waits to leverage the digital revolution the more difficult the challenge will become, and the more ground they risk ceding to competitors.
  4. This article raises an important issue around the need for advisers to understand their clients behaviors and how best to engage with them in a way that they are open to new ideas around managing their finances. It also presents a wider issue for consideration raised by the current digital revolution and the need for the industry to plan for meeting this challenge.

My bank manager knows I am risk averse, time poor, reasonably IT savvy but transferring funds as described while standing in a line seemed to me a step too far. Not so as it transpired.  I took this step because I trust my adviser.

So what are the takeaways for advisers from this scenario?

  1. There is power in getting to know your clients better than they know themselves
  2. Becoming a behaviorally smart adviser will enable you to get below the surface to the real issues much quicker
  3. By building a framework to communicate with clients on their terms you will increase engagement
  4. You will be able to customize the financial planning process for each client

Make it a priority to develop deeper relationships with clients to build trust. Doing so will set the stage for introducing the kinds of change needed in the financial industry to continue to win clients and stay ahead of the competition.

Hugh Massie
Behavioral Intelligence
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Hugh is a leader of the “behavioral management” revolution in business worldwide and bringing the field of behavioral finance to practical reality for creating and pr ... Click for full bio

China's Push Toward Excellence Delivers a Global Robotics Investment Opportunity

China's Push Toward Excellence Delivers a Global Robotics Investment Opportunity

Written by: Jeremie Capron

China is on a mission to change its reputation from a manufacturer of cheap, mass-produced goods to a world leader in high quality manufacturing. If that surprises you, you’re not the only one.

For decades, China has been synonymous with the word cheap. But times are changing, and much of that change is reliant on the adoption of robotics, automation, and artificial intelligence, or RAAI (pronounced “ray”). For investors, this shift is driving a major opportunity to capture growth and returns rooted in China’s rapidly increasing demand for RAAI technologies.

You may have heard of ‘Made in China 2025,’ the strategy announced in 2015 by the central government aimed at remaking its industrial sector into a global leader in high-technology products and advanced manufacturing techniques. Unlike some public relations announcements, this one is much more than just a marketing tagline. Heavily subsidized by the Chinese government, the program is focused on generating major investments in automated manufacturing processes, also referred to as Industry 4.0 technologies, in an effort to drive a massive transformation across every sector of manufacturing. The program aims to overhaul the infrastructure of China’s manufacturing industry by not only driving down costs, but also—and perhaps most importantly—by improving the quality of everything it manufactures, from textiles to automobiles to electronic components.

Already, China has become what is arguably the most exciting robotics market in the world. The numbers speak for themselves. In 2016 alone, more than 87,000 robots were sold in the country, representing a year-over-year increase of 27%, according to the International Federation of Robotics. Last month’s World Robot Conference 2017 in Beijing brought together nearly 300 artificial intelligence (AI) specialists and representatives of over 150 robotics enterprises, making it one of the world’s largest robotics-focused conference in the world to date. That’s quite a transition for a country that wasn’t even on the map in the area of robotics only a decade ago.

As impressive as that may be, what’s even more exciting for anyone with an eye on the robotics industry is the fact that this growth represents only a tiny fraction of the potential for robotics penetration across China’s manufacturing facilities—and for investors in the companies that are delivering or are poised to deliver on the promise of RAAI-driven manufacturing advancements.

Despite its commitment to leverage the power of robotics, automation and AI to meet its aggressive ‘Made in China 2025’ goals, at the moment China has only 1 robot in place for every 250 manufacturing workers. Compare that to countries like Germany and Japan, where manufacturers utilize an average of one robot for every 30 human workers. Even if China were simply trying to catch up to other countries’ use of robotics, those numbers would signal immense near-term growth. But China is on a mission to do much more than achieve the status quo. The result? According to a recent report by the International Federation of Robotics (IFR), in 2019 as much as 40% of the worldwide market volume of industrial robots could be sold in China alone.

To understand how the country can support such grand growth, just take a look at where and why robotics is being applied today. While the automotive sector has historically been the largest buyer of robots, China’s strategy reaches far and wide to include a wide variety of future-oriented manufacturing processes and industries.

Related: Smooth Tomorrow's Market Volatility With a Smart Approach to Robotics & AI

Electronics is a key example. In fact, the electrical and electronics industry surpassed the automotive industry as the top buyer of robotics in 2016, with sales up 75% to almost 30,000 units. Assemblers such as Foxconn rely on thousands of workers to assemble today’s new iPhones. Until recently, the assembly of these highly delicate components required a level of human dexterity that robots simply could not match, as well as human vision to help ensure accuracy and quality. But recent advancements in robotics are changing all that. Industrial robots already have the ability to handle many of the miniature components in today’s smart phones. Very soon, these robots are expected to have the skills to bolster the human workforce, significantly increasing manufacturing capacity. Newer, more dexterous industrial robots are expected to significantly reduce human error during the assembly process of even the most fragile components, including the recently announced OLED (organic light-emitting diode) screens that Samsung and Apple introduced on their latest mobile devices including the iPhone X. Advancements in computer vision are transforming how critical quality checks are performed on these and many other electronic devices. All of these innovations are coming together at just the right time for a country that is striving to create the world’s most advanced manufacturing climate.

Clearly, China’s trajectory in the area of RAAI is in hyper drive. For investors who are seeking a tool to leverage this opportunity in an intelligent and perhaps unexpected way, the ROBO Global Robotics & Automation Index may help. The ROBO Index already offers a vast exposure to China’s potential growth due to the depth and breadth of the robotics and automation supply chain. As China continues to improve its manufacturing processes to meet its 2025 initiative, every supplier across China’s far-reaching supply chains will benefit. Wherever they are located, suppliers of RAAI-related components—reduction gears, sensors, linear motion systems, controllers, and so much more—are bracing for spikes in demand as China pushes to turn its dream into a reality.

Today, around 13% of the revenues generated by the ROBO Global Index members are driven by China’s investments in robotics and automation. Tomorrow? It’s hard to say. But one thing is for certain: China’s commitment to improving the quality and cost-efficiency of its manufacturing facilities is showing no signs of slowing down—and its reliance on robotics, automation, and artificial intelligence is vital to its success.

Want all the details? Download the ROBO Global Investment Report - Summer Brings Best ROBO Earnings in Six Years or visit us here.

ROBO Global
Robotics and AI
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ROBO Global LLC is the creator of the ROBO Global® Robotics and Automation Index series, which provides comprehensive, transparent and diversified benchmarks representing the ... Click for full bio