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JANUARY 19, 2016

Goal Based Investments and Hybrid Advisory

By Michele Tanzi

Client Solution Director

Reading time: 2 min


This is a summary from the presentation about implementing goal based hybrid and robo-investment advisory, held by Michele Tanzi, Objectway Client Solution Director, last December 2nd in London, during Objectway [IN], our first International Customer Conference.

We would like to talk with you about Goal Based Investments and Hybrid Advisory, since they are two very relevant topics in the market.

Before starting a deeper discussion, we should ask ourselves what is Goal Based Investments? The answer is easy. Goal Based Investment is so simple; it just comes to align client and client wealth. And it’s also very important because places people in the center of advice process and involves them in decision making. Goal based investments isn’t just to invest, but to invest while knowing what clients want and explaining clients what we are going to do to help them to reach their goal.

Goal Based Investment Must Have a Customized Proposal

Following previous thought, first step is to engage the client and to analyse his characteristics and balance. Only after that we can define goals and identify available resources.

After goal definition, we have to analyze them deeper and fine tune by setting the best risk appetite and time horizon, and calculating probability of achievement. Finally, we can define the best asset allocation and deliver a customized investment proposal (this is a quite important topic; later on we will see that goal based investments process doesn’t imply it, while advisory should imply customized proposals instead).

Quite honestly, we think advantages are quite clear: Measure success in meeting individual’s personal and lifestyle goals (helping people to go for the final goal and not daily return); help investors to avoid irrational answers when markets aren’t performing as they expect; support multiple goals with multiple strategies (there can’t be a unique strategy valid for everything during client life); and lastly, increase confidence in personalized strategies aligned with customer goals.

Goal Based Investments is typically implemented in today Digital Era by following three different approaches: Advisor Based, Hybrid, and Fully Automated. […]

Now we focus our journey on the most interesting model, the most powerful and flexible, the hybrid one. […]

An integrated Solution for Hybrid Advisory

We strongly trust this approach and we think we should go carrying it further. We think future is Virtual Advice, as suggested by Ernst&Young and McKinsey Company in two recent reports. Virtual Advice allows you to retain the high level of personal service that most consumers demand from their financial advisor, but leverages the connective power of digital communication (e.g., videoconferencing, co-browsing) to deliver this service remotely. Virtual Advice can allow to cut costs while supplying high-level advisory via a hub that can also support a very sophisticated client. […]