The Hybrid Advice Model

By Tobias Henry

Digital Wealth Lead – Managing Principal, Capco

In its simplest form, the hybrid approach combines the best components of human-based financial advice and digital advice, offering a flexible and tailored wealth management solution to clients of all demographics.

The hybrid advice solution is underpinned by a flexible business model that can support customers throughout their financial lives, from mass market to ultra-high net worth. The hybrid approach, as shown in Figure 1, has three models to offer customers, depending on their customer segment (defined by investable assets) and the complexity of their financial needs.

Figure 1: The hybrid advice model

Hybrid advice model shows customer segment (with complexity of financial needs) for digital advisor as mass market (between low and medium), scalable advisor as mass affluent (between medium and high), and high-touch advisor as UHNW/HNW (between medium and high).

The level of human interaction, product complexity, fees and accounts offered change between business models. The business models shown in Figure 2 indicate the optionality of the solution and illustrate the flexibility of the hybrid approach to meet the needs of all customer segments and financial needs.

Figure 2: Optionality and flexibility of the hybrid model

Notes: BPS = basis points; IRA = individual retirement account; ETF = exchange traded fund

Hybrid advisor business model shows digital advisor, scalable advisor and high-touch advisor for advisor role, account types, digital features, et cetera.

The hybrid model has many inherent benefits to the financial advisor, the business and the client that make it an attractive and ...

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