PIMFA – the leading wealth management and financial advice association – held their annual FinTech Conference on Wednesday 12 September, hosted by BlackRock.

It began with a welcoming address from PIMFA CEO Liz Field who reinforced the importance of digital transformation in the evolution of the financial advice and wealth management profession.

Following this, Dr. Manuela Rabener, Chief Marketing Officer and Co-founder UK, Scalable Capital, took to the floor to discuss the opportunities for technology partnerships in the wealth management space and revealed that by 2021, approximately $1 trillion will be managed by Robo advice. She also highlighted the increasingly important role of social media for financial markets as a resource that can access huge amounts of data that can provide valuable consumer insights.

Dr Rabener concluded with a theme which would recur throughout the day – namely that, whilst investment managers will undoubtedly be affected by future advances in technology as an essential tool for helping to meet clients’ long-term needs, the Robo/Human hybrid “is a significant partnership for the future, both in terms of growth and risk management”.

Next was a topic which came top in a recent PIMFA membership poll –‘The Amazonisation of Wealth Management’ – the combining of digital channels and digital tools to build customer engagement . The panel, 11FS Global CEO David Brear and Peter van Kleef, Managing Director at Lakeview Capital, moderated by Amin Rajan, CEO Create-research, looked at other industries and their models, such as Amazon, as instructive inspiration for the wealth management and financial advice sector on revolutionising it to make it more accessible, convenient and empowering for consumers.

David Brear summed this up by stating that “a large-scale marriage of the digital delivery of human expertise in a superlatively one-to-one experience is a perfect example of what’s needed”.

Throughout the day, winners of the PIMFA Innovative Solutions Competition presented to the audience, beginning with a presentation from Envizage on their holistic advice engine which simulates ‘real-world’ risk, helping to answer the question “How likely am I to be able to do the things I want in the future?”, such as buying a house, affording to have children and planning for retirement.

Following that was Alexander Maresch (Global Head of Brand/Head of marketing, DWS Group), with a spirited presentation entitled “Go Digital or Go Home”, taking the audience through how social media, virtual reality and digital marketing can be used effectively to drive customer engagement and giving real-life case studies currently being used at DWS.

Following a networking break, Russ Kliman (Global Head, Strategic Programs & Innovation, SEI) discussed how a firm’s business strategy, rather than technology, should act as the driver for digital transformation across the entire value chain of what firms deliver every day. He further emphasised the importance of a digital mindset for firms in a world where digital drives brand awareness, disruptive technology is now mainstream, Artificial Intelligence-enabled tech now sits front and centre and data is the new precious commodity.

The next topic – Digital Transformation of Front to Back Office and Holistic Data Strategies – saw moderator Richard Maton (Partner, Aperio Strategy) introduce Mark John (Head of Product and Business Development for Pershing) and Stuart Rimell (Head of Desktop Development, IG) to discuss how buy-in from the C-Suite is essential to facilitate digital and technological transformation and that structural change of this type needs to be holistic in nature, requiring culture, business and technology to work together. Mark John also said that “in ten years’ time, 20% of the worlds’ energy use will be expended on data storage.

Vincent Molinari, CEO and Co-founder of Templum Markets, then joined us via video link to discuss the tokenization of the securities market from the US perspective and how Blockchain can transform the investor/adviser experience by providing transparency in areas such as execution, research and audit control. He cited examples such as the enabling of smaller investor to access the larger IPOs through the use of smart contracts and that fractionalised ownership of marquee real estate is now possible using this method. He also predicted that this activity would increase and that 2018 is the beginning of a bull market in security tokens.

The morning session ended with a fascinating ‘fireside chat’ between Greg Davies (Head of Behavioural Finance for Oxford Risk) and Max Mawby (Financial Behaviour, The Behavioural Insights Team) on the subject of the application of behavioural economics to deliver better financial behaviour in consumers.

Using the example of MiFID II rules requiring firms to contact their clients if their portfolio value drops by 10% or more, they highlighted that this may in fact create an opposite consumer reaction to the original intention of reassurance by causing some clients to panic. As a remedy, they suggested that trigger-point communications are sent earlier and at lower loss levels to deliver the desired outcome.

Greg voiced the feeling that ”The binary decision between Robo and Human is nonsense”, that “Robo is not Terminator, it’s Iron Man” and that we should use Robo to enhance Human, prompting the following comment from Conference Chair Lawrence Wintermeyer (Principal, Capstone); “How much human do you want with your financial advice?”