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Financial adviser’s battle cry: My kingdom for a digital solution

28 October 2020 Gareth Stokes

In act 5, scene 4 of Shakespeare’s Richard III, King Richard, who had lost his horse on the battlefield, shouted: “My kingdom for a horse”. Financial advice practices that are still writing business and servicing clients on outdated legacy systems, using paper-based processes, are probably just as frustrated. Your 21st Century battle cry should be: “My kingdom for [a practice-fit] digital solution”. The need to incorporate technology in advice practices was highlighted during a panel debate held on the second day of the 2020 Financial Planning Summit, a virtual CPD initiative run by The Collaborative Exchange.

Technology solutions for multi-discipline practices

The discussion on ‘Client acquisition and servicing technology in financial advice practices’ was also relevant to advice-focused businesses in the employee benefits and short term insurance broking disciplines. Three panellists, competently led by Francois du Toit, Founder and Director of PROpulsion, explored how technology is changing the way that advice practices acquire new business, and retain and service existing clients. Advisers and brokers were encouraged to choose digital solutions and implementation partners that were a good fit for their business. They were also warned against investing in solutions that would not add value to their practices. 

Stuart Porrill, Executive: Partner Services at Adviceworx, said that South African advice practices faced challenges in getting client data from product providers. “The data necessary for the financial planning component, the fact finding and discovery data, is no problem; but we [struggle] with ongoing data from the product providers,” he said. So, while data aggregators and data exchanges in Australia and the United Kingdom do a great job in assisting advisers with data, most local advice practices are forced to implement proprietary solutions to address their data needs. It is important to consider your data needs early on in the ‘platform and software solutions discussion’ because data will underpin any technology-backed solution that you eventually implement. 

An insatiable hunger for rich client data

Daniel Micali, Director at Silica Holdings, observed that accurate and consistent data was crucial; but suggested that advice practices carefully consider the application of that data. “Over the past two decades, system designers have looked at their back-end systems and considered their own data needs rather than what the client or adviser needs from a data perspective,” he said. This conflicts with the global demand from advisers and brokers for rich client data that meets their unique requirements. “Over the last 12 months, whether we consider open banking; whether we think about data utilisation at the platform provider level; or whether we [apply data] to the end-to-end consumer experience, we have seen financial practices’ data expectations increase,” said Emily Chen, Product Executive Wealth Management at Iress. 

The ability to offer relevant advice to clients is a key differentiator in the financial and risk advice fields. This is achieved by ensuring that personalised and relevant data is readily available for each client interaction, whether it takes place in the real world, or virtually. One of the mistakes that financial practices make when selecting platforms and software solutions is going for the ‘bells and whistles’ of complex solutions without any thought for the user experience their clients actually want. Clients do not need platforms to give a 32-page overview of their financial portfolio at any given time; but rather a concise one-pager that affirms their overarching financial objectives and how they are progressing towards them. 

There is no ‘silver bullet’ system solution

Many advisers mistakenly believe that they can resolve all of their problems with a single technology solution. “There is no Holy Grail in the systems world,” said Porrill. “Advice practices need to select their technology solutions carefully and invest in people that understand their businesses”. It is also important that the solution you choose is synchronised with your business model. “You must ensure that your advice process and client experience are clearly defined,” said Chen. “Make sure that you are not duplicating your systems; but rather looking across your advice process and seeing which pieces of technology are the best fit for your practice at that point in time”. 

Technology solutions must become drivers of your overall client experience, assisting with time intensive tasks such as processing and reporting. “At the end of the day technology needs to work for your business processes; when you buy a product or range of products the most important thing is to assess the problem you are trying to solve,” said Cheng. She added that the first step in adopting technology in an advice practice was to identify the most pressing matter that needed solving: Do not try and solve everything in one go; you can progressively adopt technology. 

A common argument offered by advice practices when contemplating platforms or software solutions is that costs are prohibitive. “Technology that allows new systems to be hosted in the cloud is driving cost points down and reducing complexity,” said Micali. Porrill agreed that costs were coming down; but warned against the knee-jerk response of snapping up multiple technology solutions and leaving them to gather dust. Too many advisers are shelling out cash on solutions that simply do not work for them. 

Sweating your technology assets

“You must select your software and technology solutions carefully,” said Porrill. He advocated choosing fewer solutions and sweating those assets rather than investing in dozens of applications that might go unused. Although caution is advocated, advice practices cannot afford to sit on their hands where technology is concerned. “We have seen enormous growth in the number of people adopting technology; we expect this trend to accelerate, especially in the wealth management space, in the next six to 18 months,” concluded Micali. 

Advice practices must choose carefully, do their homework, do the work necessary to implement the preferred solution, and then use them to their full potential. “Technology must enable the advice process,” concluded Chen. “What we consider essential in the Fintech and financial planning worlds is to achieve the right level of engagement and the right value proposition; the ability to engage makes the advice conversation a lot easier”. 

Writer’s thoughts:
It can be difficult for advice practices to choose a best fit solution set from the myriad platform and software solutions on the market. Many in the financial and risk advice disciplines rely on solutions offered by their product provider partners. Are you comfortable with the level of system support you receive from product providers? And are product providers forthcoming with the client data you need for ongoing financial and risk advice? Please comment below, interact with us on Twitter at @fanews_online or email us your thoughts [email protected].

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