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A different set of needs

09 September 2019 Jonathan Faurie
Wessel Oosthuizen

Wessel Oosthuizen

If we do not cater for the needs of clients in a more effective way, the future will overtake us. These were the words of Wessel Oosthuizen CFP, MD Verso Wealth, as he delivered the keynote address at the 9th Annual Fiduciary Institute of Southern Africa (FISA) Conference. The need to cater for clients more effectively by using technology is just another example of how the Fourth Industrial Revolution (4IR) has impacted the financial services industry.

Improve your understanding

Ooshuizen said that in order for the industry to understand the clients of the future, they need to understand the 4IR, and how it is changing the world that we exist in. 

“It is important to understand that every industrial revolution did not reinvent the wheel, it took the building blocks of society and improved them in order to enhance and enrich our lives. The 4IR has changed the game in terms of the technologies that drive society, but it is not something that we have not been exposed to in some way in the past,” said Oosthuizen. 

He added that digital technology aims to achieve a number of key objectives:

  • it aims to improve the quality of the service that clients receive;
  • it creates increasingly customizable services which pushes firms to become more specialized in specific areas that cannot be commoditized;
  • it creates an environment where there are greater outcomes for clients as firms incorporate artificial intelligence and Big Data into their analytical tools; and
  • access to real time data will shift firms towards being proactive as opposed to reactive. 

“Imagine a future where your firm’s analytical technology can access the internet and discover that a client has gotten married or is expecting a baby and you can approach them about changes to their wills or estate planning before they approach you. This is powerful,” said Oosthuizen. 

Perhaps the biggest change that the 4IR has introduced is that the world has become infinitely bigger. 

Impact on clients

One of the corner stones of many tertiary education courses is Maslow’s Hierarchy of Needs which discusses the basic needs of a person and what drives their behavior. There is a long-standing joke that the base of the traditional model needs to be amended to include WIFI as the most basic need. 

But is this actually a joke? The internet has significantly changed and shaped our behaviour. Oosthuizen pointed out that the client of the future has a different set of behaviors which becomes important for companies to understand. 

“Clients are very aware of their importance to the product provider and the value that they hold to businesses. Because of this, in every interaction with an estate planner, they will be looking for best value. They are more informed, more demanding and are more price sensitive,” said Oosthuizen who added that if they do not find value, they will walk away. 

This leads to an interesting question; a recent survey in the US pointed to the fact that clients in that market will not mind paying a premium (high price) for advice provided that value is demonstrated. Is that trend replicated in South Africa? 

Client engagement

While it seems as if the adviser’s world has been picked up and turned upside down, it has not. If they have survived the Third Industrial Revolution, they can survive the 4IR provided they can keep pace with the rate of change. 

“How financial planning companies redevelop their services will be crucial. Clients want to access the majority of the services that a company offers over the internet and they want to have 24-hour access to it. If they want to draft a will online at 11 pm, they want to draft a will online at 11 pm. Demonstrating value will be a key ingredient to success which can be achieved by giving clients more control over the self-service of the transaction,” said Ooshuizen. 

He added that it is vital for firms to implement a culture of change which overcomes a legacy culture. In addition, companies need to do less thinking and questioning when it comes to incorporating new technologies. They need to dive into it headfirst. 

“Importantly, firms will need to shift from time-based fees to fixed and outcome-based fees. Transform business models by throwing out traditional structures to direct earning models, “said Oosthuizen. 

Editor’s Thoughts:
Innovation is more about taking risks than it is about reinventing the wheel. You already have a good rapport with clients, it’s just a matter of leveraging technology to build on these relationships. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.

Comments

Added by Yeah Wright, 09 Sep 2019
"“Imagine a future where your firm’s analytical technology can access the internet and discover that a client has gotten married or is expecting a baby and you can approach them about changes to their wills or estate planning before they approach you. This is powerful,”

It is also highly intrusive and profoundly disturbing to know that my personal information, no matter what I do, is available to every wannabee entrepreneur and marketer out there.

That's why thinking people are being encouraged to close the social media accounts - facebook, twitter etc - to stop the harvesting of personal information for commercial gain.
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Added by Quinten Knox, 09 Sep 2019
What does ‘fourth industrial revolution’ even mean?

"In 2015, Nicholas Davis and Klaus Schwab started talking about the increasing frenzy around technological disruption."

"Their conversation would turn into a book — Shaping the Fourth Industrial Revolution — and a global dialogue. The Mail & Guardian spoke to Davis about their process, and what he thinks 4IR means for South Africa."



Davis:

"The first thing is that being a leader in this space is not necessarily about being a leader in technology, but being a leader in the governance around the tech to allow it to evolve and merge safely in an inclusive way."

"The South African government needs to focus on looking first at the needs of citizens, rather than saying, “Here are some shiny, bright new objects that we can put into play.” It needs to ask: “What are the perennial issues that we have that this revolution and these technologies might open up new solutions and more efficient solutions for?”

"The second thing is setting the framework for the use of artificial intelligence in the economy, which gives certainty to entrepreneurs about how they can operate. It gives them the space to do so. Also, work hard on public data sets to ensure that when people are developing applications or services that rely on artificial intelligence, data is readily available."

SOURCE: https://www.fanews.co.za/article/talked-about-features/25/the-stage/1145/a-different-set-of-needs/27474

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