Personalisation in wealth management has become a must-have. Consumers want services that are relevant to their individual situations. But the question is, what does a perfect personalised investing experience look like?
Speaking to FinTech Global, Fredrik Davéus, CEO and co-founder of Kidbrooke, believes that the answer lies in an experience that feels effortless, relevant and empowering. “From the client’s perspective, it’s about understanding how each financial decision can be explained and how it optionally can fit into their broader life goals.”
As part of this, the service should understand the client’s financial context, including savings, pensions, mortgages and protection. It also needs to provide clear, actionable insights that show real-time calculations based on their exact circumstances, rather than generalised or standardised assumptions. “Whether the client interacts through an app, an advisor or a chatbot, they should experience consistent, evidence-based guidance,” he added.
Personalisation is not a new concept for wealth management. Typically, wealthy investors would have an adviser to build a highly curated portfolio that meets their exact financial situation and goals. However, as WealthTechs have removed many of the barriers to accessing the world of investing, firms have been trying to cater to a wider market through digital tools.
These services typically rely on solely digital engagement, without an assigned investor. Investors might be given a selection of pre-created portfolios to pick from or be given free rein to build a portfolio on their own.
Demands are now changing, and retail investors want to have tailored experiences, rather than the one-size-fits-all-approach. A report from McKinsey claimed that by 2030, up to 80% of new wealth management clients will want advice through a Netflix-style model that leverages data for hyper-personalisation.
Hyper-personalisation is the next advancement of the tailored investment service. Unlike personalised services that might leverage basic customer data, such as demographic and purchase history, hyper-personalisation goes a step further to combine broad data with real-time behavioural data to ensure products are relevant to their current situations.
Vitaly Kudinov, senior vice president at Devexperts, also noted this shift as part of the journey towards a perfect personalised experience.
He said, “Many investment companies today offer robo advisory services. These services pretend to be personalized, based on information provided to them during the onboarding process, before a deposit is made – information such as your investment terms and goals, risk appetite, average income size, and expenses. So, while they know a lot about you, they still tend to offer fairly standard products as part of their ‘personalized recommendations’ – usually a set of between six and ten funds being regularly rebalanced.”
He added, “When I think about the ideal personalised investing service, I imagine something similar to a modern, personalised medical care system that is tailored to the unique needs of each patient. The technology required for this highly personalised approach is available, and has been for quite some time – it is just not being adopted in a timely manner.”
Mistakes with personalisation
Firms often make mistakes when it comes to personalisation, with the most common simply being not understanding what it really entails.
Davéus explained that most firms confuse personalisation with customisation. “Changing a dashboard layout or offering pre-set portfolio templates is not the same as tailoring investment advice to an individual’s actual financial reality.”
He added, “True personalisation requires the ability to aggregate and model the entire context of the financial query being analysed, including relevant future outcomes.” Unfortunately, legacy systems are preventing many firms from achieving this. Their systems often work in silos, focused on investments without factoring in liabilities, protection or real-world goals. This results in a rigid structure that cannot support true personalisation.
“The solution lies in combining robust analytics with explainable, regulator-ready technology. Firms should invest in platforms that unify relevant data, apply scenario modelling, and present outcomes in an understandable and compliant way.”
As for Kudinov, he sees many firms making the mistake of not understanding the differences between clients. “Investment companies do not take into account the different experience levels their clients might have.” Contrary to what you might think, this isn’t related to age, but the knowledge of investment types and awareness of associated risks with asset types.
“I see that many companies, especially neobanks and neobrokers, both of which tend to target younger generations, push different investment products as if it is a game and not clients’ money being invested without proper risk controls. “Look what other people trade” is the most unforgivably misleading strategy in “personalisation”, but unfortunately it likely brings brokers good results.
“I think what would be much more valuable in terms of a personalised approach to investing would be a catalogue of investment products broken down into suitable deposit/withdrawal scenarios, risk level, horizon, and a personalised what-if simulator based on the client’s chosen products, together with a comparison to different benchmarks.”
When it comes to generational differences, Kudinov believes they are slowly disappearing.
“I think the generation gap is fading. Internet and mobile phone adoption has reached even the oldest generation, meaning that with the same technology platform financial organisations can provide a variety of financial products for different investment scenarios. I think that considering the specifics of tax, labour, and pension laws, and cultural and religious nuances in different countries, is more important than the client’s age.”
On the other hand, Davéus still sees disparities between how generations want to interact with their finances and should define how personalisation should be delivered. He noted that younger investors want immediacy, clarity and digital self-service, while older generations want guided conversations with advisors. However, he did note there are still many older customers that like digital self-service tools, so firms need to be able to meet the various needs of their customer base.
“The main challenge is that you need the underlying analytics to be identical. That’s the power of an omnichannel approach: firms can offer multiple interaction styles while ensuring that every recommendation stems from the same analytical core. This consistency builds trust and bridges generations, rather than dividing them.”
Barriers with unlocking personalisation
Alongside the misconceptions around personalisation, there are several barriers that prevent firms from implementing the perfect experience. For Davéus this includes fragmented data architectures that leave customer information spread across legacy systems, which limits the ability to gain a unified financial view.
Kudinov also highlighted the restrictions caused by legacy systems, namely their inability to automate manual workloads to streamline operations. He said, “The modern investor expects that his communication with the investment company will take place through a mobile application or a lightweight website with detailed and personalised information and reports in real time. Automation reduces broker and asset manager costs. Otherwise, they lose out to the competition. Therefore, my only answer to this question is – software!”
Secondly, there are firms that have regulatory and compliance concerns with the use of automation and how it could undermine accountability. However, Davéus explained a well-designed model can enhance transparency. Finally, he pointed to cultural inertia with many firms treating analytics as a back-office process, rather than a customer-facing enabler of engagement.
“To overcome these barriers, we need to view analytics as a shared foundation for both digital and human channels, the “engine room” of a scalable, compliant and personalised service.”
Sharing their final thoughts on delivering the perfect personalised experience, Davéus said, “Personalisation is fast becoming a regulatory expectation under frameworks like Consumer Duty. To deliver it effectively, financial institutions must rethink their infrastructure. You can’t simply add an AI layer on top of existing tools, but you have to embed explainable analytics and personal relevance into the very architecture of advice and product design.”
Kudinov concluded, “When developing personalised scenarios, it’s important to remember a specific type of client, which can be briefly described as “shut up and take my money.” For them, the most important criteria for choosing an investment company will be its reputation and guarantees of the safety of savings, and not the variability of offers. Therefore, having a “shortcut” for onboarding this type of customer will always be a win-win.”
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