It’s virtually impossible to run a financial advice business without technology these days. What might a truly technology-enabled practice look like? More to the point, is it possible?
The right tools for the right job at the right time
The most obvious starting point is the toolkit of software and technology services that a business could use to fulfil its needs, wants, and obligations. There are more than ever to choose from. The bottom line is that, despite the breadth of features offered by any piece of tech, it’s tough to find an advice business that uses a single solution for everything.
So, if we accept that most advisors use multiple systems for distinct purposes, and that the one-stop-shop model steadily continues to lose popularity, a business that prioritises technology-enablement would invest in making good choices about appropriate combinations of technology as well as when and how to implement each component.
Is it possible? Absolutely. With some solid research, clarity of purpose, sensible planning and regular review, it’s not that difficult for even the smallest independent financial advisor (IFA) practice to come up with a technology strategy that allows one to make software buying decisions with the end in mind, enabling the most appropriate selections, implementing the basics first and growing a complementary toolkit over time.
Integrated and efficient
The downside of using multiple technology tools is lack of integration between systems and, by all accounts, it’s an oft-noted frustration in our industry. Nevertheless, the best-of-breed approach is valuable because it allows advisors greater flexibility in delivering compelling and differentiated, rather than just compliant, services. An integrated model improves both the business and client experience by reducing duplication and manual data maintenance and by enabling access to pertinent information via different front-end applications by different types of users.
Is it possible? Definitely. If effort has been applied to planning and balanced purchasing decisions regarding the selection of tools, integration options will already have been a key consideration in designing the most optimally connected model possible. Many technology providers recognise the value of seeking standard integrations with complementary solutions and the options for users are growing. Connectors are increasingly available to help financial service providers (FSPs) to connect commonly used applications and data sources more easily and cost-effectively than via complex in-house custom integration pursuits.
The limitation? Duplication of effort and information exchange between advice businesses and product providers are still a challenge, such as for digital onboarding and straight-through-processing purposes, but there’s more action than ever in the application programming interface (API) space among forward-thinking institutions.
This is really the point, isn’t it? All technology considerations ultimately boil down to being able to offer better financial advice to more clients.
Client portals have been a bit of a buzz-thing for the last few years.
If the ideal client is connected and engaged, understands the worth of financial advice and enjoys a trusted relationship with an advisor, then surely technology should be harnessed to augment an appropriate level of engagement that suits the client’s journey, not an arbitrary A/B/C sliding scale of attention. It may not be in the best interests of an advisor, much less his or her clients, to blanket offer “high-touch” (which – let’s face it – typically translates to “manual”) services to high-value clients and “low-touch” services to less profitable ones. Automation in servicing is becoming so well-developed in daily online life that high-tech/low-touch approaches are arguably more effective in many ways because they are designed to deliver the right information at the right time and to simplify complex things, allowing people the opportunity of self-service in areas where it makes sense.
No advisor who has a strong relationship with clients can easily be “disintermediated”, so it’s somewhat counter-intuitive for advisors to intentionally disconnect from the lower 80% of client relationships based only on perceived profitability. A truly technology-enabled business, I think, would aim to use technology to best facilitate the automation of functions that are not primarily valuable to the relationship, thus being able to spend more time on human connection and allow clients to have some choice in just how digital their relationship is. Clients should be able to participate in the planning process in more meaningful ways than over a coffee and a pile of papers once a year.
Is it possible? Sure – with a bit of design thinking. Client portals have been a bit of a buzz-thing for the last few years, though it’s tricky to get it right without the use of appropriately selected tools and, more importantly, access to aggregated data. Everything from onboarding to ongoing financial education to tracking against financial goals can be digitised and placed in clients’ hands in such a way as to enhance advisor-client relationships without the need to intercept every action.
A tech-enabled business would consider the best ways to curate its digital customer journey and empower both the client and the advisor