Rama Gollakota (left) and Ashish Sharma

Wealth 3.0 differs over its previous generations of wealth management with a focus on a broader demographic of service as it expands to include mass affluents and advice practices will have to adapt their offerings to service those clients according to a report.

The report, produced by consultancy firm Oliver Wyman along with Morgan Stanley, underlines the necessity of investing for a differing service landscape.

Oliver Wyman principal Rama Gollakota tells Professional Planner the critical element of Wealth 3.0 is the move from pure face to face to advice to incorporate digital advice.

“It’s not going to be pure play because in this country there’s not a regulatory framework that supports self-directed advice.”

A hybrid element will be needed to service some needs, but holistic advice will be dependent on face-to-face advisers.

“People who are able to address some of the financial advice needs like savings, but where they have more complex needs being able to access an individual financial adviser will help address some of those longer-term needs.”

The graphic below visualises the different ‘Wealth’ generations and the evolution from traditional one on one advice to the affluent to a broader market through multimedia channels.

There will be three areas that wealth managers need to focus on in the transition to Wealth 3.0 Coverage and service model, delivery models, and value management.

Coverage and service model will see the introduction of omnichannel capabilities; notably the usage of human-led hybrid advice.

Delivery models will adapt to be able to serve clients through different lowest cost models to help serve lower cost clients.

Value management works off the back off digital services by utilising portals for clients to access data at any time.

Gollakota says there will also be a renewed focus around investable asset classes.

“Fixed income will make a bit of a comeback. We’re also seeing diversification around segments that will start to play in the wealth management value chain.”

Typically, Gollakota says, these asset classes have only been targeted for the affluent ultra HNWs.

“Increasingly we’re going to see more of the mass affluent segments because they have liquid wealth.”

With the Quality of Advice Review underway which will look at digital advice, Oliver Wyman partner Ashish Sharma says it’s unlikely there will be new regulatory surprises.

“The question is now how we plan and implement those recommendations.”

Join the discussion