Aligning business models with technological changes

03 November 2014 Johann Maree, Australian Correspondent

In the continuation of the first article by Johann Maree, Australian Correspondent, on developing and advice model of the future, we look at aligning your business model with technological changes.

In the first part of the article we looked at the strategies for future financial advice.

To understand the advice model of the future the adviser will need to understand the evolving needs of their clients in the next ten years.

Technological developments

Development question: Do you have a team of affiliated experts that can help you achieve your client’s goals and dreams?

The 21st century began with crises — the technology bubble, the terror attacks of 9/11 and the 2008-9 financial meltdown, but it also brought dramatic innovations in mobile computing, social media and communications.

As a result of these crises, the way clients research and trade investments, communicate with advisers and benchmark their performance has been transformed—and their expectations are evolving in a way that could create exciting new opportunities for advisers.

Over 83% of investors use smartphones and going forward clients will expect to use their mobile phones to access their financial information and communicate with their financial adviser. It is clear that clients expect much more technology-based services than advisers seem to be prepared to provide.

Clients want access to their financial plans and investments from anywhere at any time. Advisers will need to offer their clients more online services than ever before through smartphone applications.

Help clients save

Development question: How can you provide the same level of service and responsiveness to your clients as your favourite consumer website?

Consumer anxiety about retirement risks internationally has jumped dramatically in all age groups as a result of the global financial crisis. This has prompted many individuals to re-think retirement.

A vast majority of individuals are inadequately prepared for retirement and are now seeing retirement saving as a critical priority. They value personal advice and guidance more than investment selection. They want help with budgeting, saving and planning. To appeal to them, you need to offer guidance for meeting these needs. Helping them build savings is a powerful way to differentiate yourself in a way that clients value highly. If you want to start with an online offering, these investors are interested, especially on the low end.

Reach out to new clients

Development question: What does your client retirement proposition look like?

In its broadest sense for a financial adviser’s business to be sustainable it has to get clients, and then it needs to keep them. For a long time advisers operated under the mistaken belief that the quality of their investment advice is what attracted and retained clients.

Yet there is increasing research to show that what attracts clients is trust. One of the best ways to achieve this is by establishing a process to continue communications with clients and prospects and let them really get to know you and your business. The Internet and technological advancements now enable financial advisers to market their businesses in exciting new ways.

In fact, if a prospective client cannot find you on the internet how can they be expected to do business with you? New clients, especially the Next Generation, use social media to discover, explore, decide and refer. Why not reach out to younger clients now, as they are building wealth, with a low-cost online offering?

Develop a strategy

Development question: What is your social media strategy?

Despite the challenges it is great to be a financial adviser. By aligning your business with the changes occurring in the financial services industry you can overcome the obstacles you feel are limiting your success. If you understand the evolving needs of clients and implement the above, you will be well set in creating an advice business for the future.

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