The word technology is bandied about in financial services as the key to deeper client engagement and the delivery of scalable advice but the majority of advisers have difficulty understanding how to leverage technology in their business and advice processes. Jon Shaw explains.
The average 40-something financial adviser recognises that technology has the power to transform their advice and business processes, but they have difficulty understanding how to leverage technology to increase efficiency and productivity.
But adopting technology doesn’t have to be daunting or complicated. The advent of cloud-computing and Software as a Service (SaaS), which allows consumers to easily and relatively cheaply license software on a subscription basis (think Xero, Salesforce and even Mailchimp), has removed traditional barriers to adopting sophisticated technology.
There are three key ways technology can help advisers drive growth and efficiency.
Effective client engagement and marketing
- Effective client engagement and marketing
- Increased practice efficiency and productivity
- New product development
Mobile technology is changing the way businesses connect with their customers yet financial advisers largely connect with their clients the same way: face-to-face or on the phone.
There are programs which would allow advisers to set up alerts and send automated messages as an alternative way to remind clients when it’s time to book a quarterly review, update their will, lodge a tax return, top up their superannuation fund or simply tell them about a new product or service.
Automated messaging also allows advisers to send advice documents like Records of Advice and performance reports efficiently and to a large number of clients within a short timeframe.
There are many free video conferencing services available to advisers and their clients that need no integration or very little set-up at all, to get started. Used well, these services provide an easy yet professional method for effective client engagement.
Another way advisers can communicate with their clients is through Webinars, which allow communication with a number of clients at the same time without an adviser even having to leave the office.
The combination of older clients becoming less mobile, and younger people seeking advice, is likely to see more advice practices use video conferencing technology as a way to reach, educate and communicate with their clients.
Increased practice efficiency and productivity
It’s never been quicker or easier for investors and advisers to transact, execute investment ideas and implement changes across a broad number of portfolios.
Straight-through-processing and data sharing removes the need for advisers to manually collect and re-enter client information leading to enormous efficiency gains.
A common way to lift efficiency is to integrate technology solutions to create a streamlined system. An example of this is the integration of Moneysoft with financial planning software, Xplan, which allows advisers to collect and feed basic information on a client’s financial position and cashflow into Xplan’s front-end platforms.
Historically, if an adviser wanted to make changes to a model portfolio, they needed to manually issue every affected client with a Record of Advice (RoA) and gain written approval. However, advisers now have the ability to electronically alert clients about a proposed change and give them the ability to tick a box and instantly approve it. That change can then be automatically implemented across the portfolio.
This is just one example of how technology is making advice processes more scalable and efficient while reducing the amount of paperwork required and reducing the amount of repetitious, manual work required.
Furthermore, advisers can electronically record, store and retrieve client information, including audio and video files of meetings and conversations.
New product and service development
The flow-on effect of a more engaged client base and greater automation and efficiency, is that advisers can spend more time developing new solutions to meet their clients’ evolving needs.
In the last few years, there has been a renewed focus around savings, budgeting and cashflow management services due largely to demand from younger clients and the availability of cloud-based technology which automatically gathers client account balance and transaction data from a wide range of sources to provide advisers with a complete picture of a client’s total financial position as well as their financial behaviour.
Historically, product development was lengthy and expensive but with cloud and SaaS technology businesses can speed up the process by testing rudimentary ideas; tracking the take-up of new offerings; electronically surveying consumers to learn about their experience; and quickly accelerating popular ideas or ditching them completely.
The financial services industry could take its lead from telecommunications, which is constantly trialling different mobile, data and service plans, to see which service package has the most traction in the market. Services are constantly tested with unpopular ones commonly being demoted within months of being launched with little disruption to clients and minimum commercial impact to the business.
Telecommunications providers rely on technology to deliver their own services but a large and increasing part of the use of technology across the last few years has been focused upon improving the customer experience.
When it comes to adopting technology, the financial advice industry may not be on cutting edge but it isn’t as far behind as many might think. Technology doesn’t have to be complicated. In fact, it can provide huge upside for very little effort. It’s not as hard as many might perceive.
With technology, advisers can make big or small changes to how they do business with minimal disruption and cost, but the potential to reach new advice audiences, better serve existing clients and ultimately boost efficiency and productivity is huge.
Jon Shaw is head of operations and technology at Moneysoft.
This article was also published in Professional Planner on 7th March, 2016