A perfect way to achieve
Over the course of history, automated processes have changed industries and the way we consume products.
Whether it was the Gutenberg Press, or Japanese assembly lines where machines that were driven by robotics assembled cars, automation has played a central role in the world’s three previous industrial revolutions.
The future is now
As the world gravitates towards the internet and the automated services that it offers, the financial services industry is being forced to take a step back and assess the appropriateness of the models that currently run the industry.
“Automation will be a major influencer in the future,” Eugene Maree – CEO of Wealthport – told delegates at the recently held 2017 SRP Africa Structured Products & Alternative Investments Conference, “it will be a major influencer because it is a perfect way to decrease costs and to access a large-scale client base with minimal effort.”
This is not to say that automation is not a current feature of the financial services space. In fact, we are starting to see an increased number of robo advisers being launched. Maree points out though that the reason this has not had a major impact as yet is because automated platforms have not delivered the returns clients expect.
“The industry needs to embrace automation. This includes advisers, because in the future, a client may not want to deal with advisers who do not have some level of automation included in their options,” said Maree.
Low hanging fruit
The problem with automation is that the industry does not know how it will affect them in future. This uncertainty is perhaps holding advisers back from embracing automation.
There are low hanging fruits that advisers can target. Lance Solms, Director of Retail Business Development and Customer Relations at Itransact, said that advisers merely have to pay attention to the way clients want to consume information.
“Reporting back to the client is a major touchpoint that companies like to pay attention to. The clients of today want to know what is happening with their investments and want to know how to manage their wealth. They want information at the touch of a button. If companies can produce information faster than competitors, they will have a better retention rate. Automated systems are perfect ways to achieve this,” said Solms.
Vertically challenged
Fritz Jost, Global Head of Acquisition at Leonteq Securities, said that companies are so busy looking for new business that they are missing a major opportunity when it comes to vertical growth.
“Existing clients already know the company and trust the products and services that were offered to them. Why not do more with these clients? Build automated systems that allow you to sell more products to these clients and build on their wealth. Wealth management is just as important as selling products; automation is a perfect way to achieve this,” said Jost.
No fear
Maree points out that the key to surviving automation is that advisers must not fear it, but rather embrace it. “Think of what your technology strategy will be and work on implementing it, because when automation happens, it will happen fast,” said Maree.
He added that automation will also not occur in the way that many people think. Further, Maree feels that automation is a perfect fit for advisers.
Every adviser has a number of clients who invest more with them than others. Naturally, these clients will want to be given more attention than others. Automation is a way to provide these clients with the advice that they are looking for in a manner where they feel that they are taking charge of investment decisions.
“At the end of the day, if advisers do not get onside when it comes to automation, we will see robo advisers taking over the industry,” said Maree.
Editor’s Thoughts:
Technology is a new frontier for advisers, but it is hardly the last frontier. Advisers have been through change before when direct players increased their influence in the industry. Advisers need to sit down, breathe and develop an appropriate response to technology. What are your views? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.
