Cash habits have changed - why the wealth industry should follow suit

Posted by David Magee
Posted on September 07, 2020 Leave a comment

When I got the opportunity to speak to Heather Hopkins on the NextWealth podcast - one of the most informative platforms focused on the wealth management industry - I knew that two topics were going to take centre stage during our conversation; the current economic climate and what needs to change in the wealth management industry.

During what has been some of the most challenging months for the UK economy in the past few decades (it’s said that the current recession is worse than the 2009 financial crisis, and the Great Depression), people’s choices surrounding their cash holdings and habits have changed. As many think more about their current cash situation vs their future cash situation, due to the volatility of the job market it feels as if the wealth management sector also needs to change their thinking to keep up with the mood of the economy.

It’s the norm for wealth managers and financial advisers to check in with their clients once a year - formally known as the annual review. It’s now time to review this practice amidst the chaotic economy that consumers are trying to navigate, as I mentioned in the NextWealth podcast. 

Frequent check-ins would be beneficial for all parties involved. Wealth managers and financial advisers who have access to tools that can prompt them to be more proactive, and to better deal with external changes like bank rates and significant life events will then be fully equipped to offer services that can yield financial rewards for everyone. For an adviser, it’s not only about increased returns, but they also need a simple to navigate platform in order to drive higher customer engagement, in addition to timely prompts to provide touch-points with their customers. We are already seeing innovation in this space, however, the reality is that these changes won't become mainstream for another three to five years.

Akoni's white-label wealth management services offers technology that will facilitate financial advisers to give their customers better support. No customer wants to see 350 bank products - that makes for an overwhelming experience. By using personal, behavioural and Open Banking data, financial advisers and wealth managers can use one marketplace that presents a curated choice of products. This helps those using the marketplace to proactively react to any changes that may influence cash held for the customer.

With rates so low we are seeing a high demand for cash management products. Through our work with several financial institutions including banks, accountants and wealth management firms, I noticed some trends worth mentioning, and when I asked myself why, I realised that there were two major factors behind it: 

  1. Several firms were already looking at cash solutions in the market. This is because of the increased uncertainty and volatility in the global markets over the past year even pre-Covid. Customers have been searching for a holistic approach via their advisers, and in turn, advisers want to support fulfil this need. Although we have stepped out of lockdown and into a recession, many firms know that although it may be a long road ahead, we are on the track to economic recovery. So to have these nimble technological solutions in the making, when we all know that it can take two to three years to implement properly and user test, it’s best to have a forward-thinking attitude in these situations, which many of these advisers have. 
  2. Challenger rates are not going to drop off. Challenger banks are still operating at a high rate, around 1.8%, although the market base is 0.1%. Banks still need to fund very large lending books, and clients are increasingly looking for bank diversification. It is frustrating and near-impossible to manage in the current environment where you still have to fill out individual forms every single time you want to move money. The experience is seamless with Akoni as we have an entirely digital on-boarding process - quite literally three minutes from your sofa, and we use facial-verification through camera submission. In the age of technology and the limitations put upon us due to Covid, advisers are looking at solutions that make life easier for both them and their customers.

Although the pandemic has triggered a recession therefore creating a reliance on technology to get things done, it is the push that the wealth management industry needed to accelerate it’s offering and become more innovative and tech-savvy for the sake of both the advisers and it’s customers.

You can watch the full interview with NextWealth here. If you want to find out more about Akoni and how we support advisers and the wealth management industry, you can visit our website, or you contact us directly.

About Akoni: Akoni is an award-winning UK cash platform, which provides a marketplace to SMEs and charities, as well as to individuals through our white label distribution partners including IFAs, wealth platforms, accountants and SME hubs. Akoni uses innovative technology to personalise cash planning solutions for clients, and also provides a full API solution to banks and insurance clients.

Contact us and Find out more and 

Recent Posts


see all