Hymne Landman, Head of Momentum Wealth at Momentum Investments
At Momentum Wealth, we believe the time is now for platforms to invest capital to ensure that our business models are ready to respond to disruption, and enable advisers and clients to be ready for a different future world of wealth management.
The world of today
According to the 2022 digital global overview report1, South Africans aged between 16 and 64 spend 10.5 hours on the internet every day, almost double the global average, and this has increased by almost 30% over the past three years. Despite spending the majority of their day online, e-commerce adoption rates locally are much lower compared to the rest of the world. However, if online banking trends are anything to go by, financial advisers and platforms should prepare to meet clients where they spend most of their time – online.
Every year Momentum Wealth partners with NMG Consulting in the UK to obtain in-depth market feedback from around 150 face-to-face interviews with independent financial advisers.
In the latest study, conducted in September last year, financial advisers expect linked investment service provider (LISP) platforms, advice models and practice management as the three areas in our retail wealth industry to be most susceptible to disruption. Our view is that the experience of advice and wealth management will be radically different in the next few years. And that is why we are investing in the required capabilities to enable our financial advice partners for a world that will look different.
As an example, data and algorithms will likely power the future of advice and will enable us to anticipate clients’ changing needs to adapt advice and solutions accordingly.
We believe that, as a platform, we will increasingly embrace the power of data and information in our systems to hyper-personalise client experiences, such as communication and reporting.
When your clients retire, they can now enjoy certainty and flexibility in one retirement income solution. The Momentum Retirement Income Option (RIO) gives your clients the best of both worlds. By including a life annuity in the form of our Guaranteed Annuity Portfolio as an investment component in our living annuity (RIO), you can offer your clients the certainty of a guaranteed income, as well as flexibility and potential market upside.
At Momentum Investments, we are dedicated to giving you every possible advantage to help your clients on their investment journey to success. Because with us, investing is personal.
Momentum Wealth (Pty) Ltd (FSP 657) is an authorised financial services provider. Momentum Investments is part of Momentum Metropolitan Life Limited, an authorised financial services and registered credit provider (FSP 6406).
The Retirement Income Option and the Guaranteed Annuity Portfolio are life insurance products, underwritten by Momentum Metropolitan Life Limited, a licensed life insurer under the Insurance Act and administered by Momentum
Wealth (Pty) Ltd. The information in this advertisement is for general information purposes and not intended to be an invitation to invest, professional advice or financial services under the Financial Advisory and Intermediary Services
Act, 2002. Momentum Investments does not make any express or implied warranty about the accuracy of the information herein.
An example of how data can be used is Momentum Investments’ research on behavioural finance. Using unsupervised machine learning, the behavioural finance team identified four different investment personalities, which behave differently under certain market conditions. Our future platform envisions insights for advisers where predictive analytics can be used to empower them when markets tumble. For example, during the 2020 volatility in global markets, the number of switches on the Momentum Wealth platform increased by 60%. If we were able to warn advisers and clients to stay invested and avoid the so-called ’switch itch’, clients’ returns would have been 6.5% per year higher on average.
By establishing these capabilities, we believe that we can significantly enhance the advice processes of financial advisers and strengthen their client proposition.
With us, investing is personal and we believe that people will remain at the core of client relationships. Partnering with digital technologies in the right way will enable our advisers to serve clients in a more effective and personalised way. Despite the strides in artificial intelligence (AI), we believe that nothing can replace the value a financial adviser adds to the lives of their clients. AI, however, will aid advisers in many ways to enhance the value they add.
While many platforms have been experimenting with blended models, local capabilities are still evolving and adoption rates have been relatively low. The Covid pandemic has proven that human-digitech hybrid models are needed, that these models can work, and that they are indeed now part of the ’new normal. The industry needs to use this momentum for further digital support to enhance the client experience. Our future will require a seamless blend of human contact and technology interactions, where clients will increasingly want to self-serve and interact in digital formats.
This transformation has more benefits than an enhanced experience for all:
- Advisers can spend their valuable time where it matters most, with their clients, optimising the investment strategy and giving advice. We have experienced the time taken on some of our processes reduced by days, taking only minutes to complete end-to-end.
- Moving away from paper-based processes that used approximately 1.3 tons of paper saves 32 trees a year.
- Lower operating costs for financial advisers, clients, and platforms alike.
Advisers and platforms should work together to leverage technology to unlock some of these benefits so that we can invest where the human impact matters most.
We believe that the time is now for platforms to accelerate our own capital investment to ensure that we invest in building the core foundation of technology that in the future will provide us the agility and flexibility to respond to the needs of financial advisers and their clients. That is exactly what we are doing in building the future of Momentum Wealth.