IA Guide to technology 2019
Guide to technology
<i>International Adviser</i> \editor Kirsten Hastings \introduces this \guide to technology
Technology is being pushed as the ultimate solution for all problems in the advisory and wealth management space. Too much admin? Use tech. Not enough time to see your clients? Use tech. Can’t find enough clients? Well, you get the picture.
But, to date, it has not proven itself to be the Rosetta Stone of success. There is not one piece of kit that advisers are raving about as the solution to all their problems – at least to my knowledge – which may be the problem. Are we expecting too much?
Technology is a tool that can elevate a business, improve its offering, ensure it complies with regulation, and integrate systems and functions to make the user experience as frictionless as possible.
But older advisers who have grown up in a face-to-face world, with clients who have done the same, struggle to see the value of this approach. Apps don’t build real trust. Skype calls are less personal than sitting in someone’s living room and chatting over a cup of tea.
There is also a ‘fear factor’ when it comes to using technology. For a lot of advisers, there is an unease about being so dependent on electronic records.
Compare this with younger advises who have grown up surrounded by tech and apps but may be lacking the art of conversation and, therefore, may be more limited in building lasting adviser/client relationships.
Who you gonna call?
To steal a phrase from Ghostbusters, you have to “cross the streams”. A hammer is just a hammer, a screwdriver just a screwdriver. It is the skill of the workman that makes a tool work at its best. But you also don’t use a drill to cut a plank of wood in half and sometimes it’s best not to use a tool at all.
‘You don’t use a drill to cut
a plank of wood in half and sometimes it’s best not
to use a tool at all’
Different clients have different needs, but that doesn’t mean that an 80-year-old widower won’t want to use an iPad to see his investment account. It also doesn’t mean a 25-year-old engineer won’t want a face-to-face chat to discuss her pension options.
A judicious use of technology can make clients less reliant on advisers for updates, reduce the mountain of paperwork advisers often find themselves under and build stronger relationships.
The contributors to this guide – Old Mutual International, Praemium, RL360 and Sagari – outline some of the technologies that can help advisers drive their businesses forward to meet the rising challenges of an increasingly online world.
Kirsten Hastings, editor,
Technology offers key benefits for advisers, writes \Cherry Reynard, helping to improve client interaction and providing efficiencies for important back-office functions
There is a golden opportunity for advisers to scale their businesses over the next few years. Demand for financial advice has never been higher. In harnessing this opportunity, technology has become an increasingly important part of an adviser’s toolkit, allowing them to communicate better with clients, manage regulatory change and employ better practice management.
For those who have undergone the often painful task of implementation, the rewards have been significant, allowing them to grow their client base.
Far from taking the adviser away from the client, technology allows them to service clients better. Most other areas of a client’s life is tech-enabled, from paying bills to doing all their banking online.
To only access their investment portfolio, which may be the greatest source of wealth outside the family home, intermittently, or through consultation with an intermediary, seems anachronistic. Clients rightly expect 24/7 access to portfolio and investment data.
A survey by RBC Cap Gemini in 2014 showed that when advised clients were asked whether they would stay with a financial adviser who didn’t provide digital access to their portfolios, 65% said no, rising to almost 80% for those aged under 40.
It is 2019, the point by which those clients had promised to act. This should make non-digital advisers nervous.
The right system should also facilitate secure communications and document exchange. The FSA has long warned that web mail is too insecure an option for client data. The number of high-profile data breaches would seem to confirm this. Digital adoption shouldn’t just be driven by a fear of getting fired or poor security, there are tangible relationship benefits. It also makes a huge difference in how frequently advisers engage with clients.
Done right, it makes people more engaged with their long-term wealth planning and creates a more transparent relationship.
Technology also has the power to change the way advisers interact with clients. For the most part, it is poor use of an adviser’s time to travel an hour each way to spend an hour with a client. Both clients and advisers are busy and the time could be better spent.
The desire for shorter meetings at more convenient times is often driven by the clients themselves. Technology allows this to happen and should also help advisers reach a much broader audience.
Increasing regulatory demands are difficult to manage without technological intervention. Notably, GDPR has been a significant headache for many advisers. In most cases, there is simply no way to deal with this except through ‘regtech’.
Most importantly, technology enables advisers to document the advice process, making it far easier to demonstrate compliance. This has the welcome side effect of improving efficiency and therefore driving better business models.
Included in this would be areas such as risk profiling. The FCA has become increasingly focused on suitability. Manual processes in this all-important area expose an adviser up to potential inconsistencies and therefore regulatory problems.
At the same time, cashflow planning tools help identify the risk clients need to take to achieve investment objectives.
‘Technology enables advisers to document
the advice process, making it far easier to demonstrate compliance’
Implementing technology solutions can be cumbersome. It draws key staff members away from their primary tasks. However, ultimately, there should be less need to re-key data and it leaves less room for error.
Government initiatives such as ‘Making Tax Digital’ increasingly require a seamless digital process and many advisers are now aspiring to similar, paperless solutions.
In this, they are often thwarted by life companies and asset managers who insist on paper-heavy client statements. However, change won't happen until advisers demand it.
Practice management systems now form a central store of client data, while enabling proper workflow. They can help with document management, alongside regulatory reporting and accounting.
There have been concerns that this will take away manual jobs from valued staff. If they are worth their salt, they should be able to progress to more value-added work as a result.
Technology-enabled businesses report an increase in staff wellbeing and satisfaction. Few people thrive on data entry.
There is another area where technology can help: reaching out to future generations.
Robo-advice remains controversial and many practitioners don’t feel they need to offer it. They have enough clients in drawdown to last their career.
However, to embed value in a business, more has to happen.
Nick Eatock, executive chairman at Intelliflo says this protects an adviser’s future pipeline among those who can’t afford advice today, but are starting to build their wealth: “It is a way for advisers to start creating a relationship they value.”
Embracing technology is crucial
New technology can be \difficult at first, but the \benefits going forward \vastly outweigh \a little pain in \the present
For better or worse, changes to the various regulations that govern the global financial advice markets often alter the way international advisers have to work and engage with their clients.
In the UK, one of the biggest regulatory changes in recent history came in the form of the Retail Distribution Review (RDR) but since then there has been a slew of others across different jurisdictions, including the most recent introduction of the Isle of Man Insurance Conduct of Business (IOM COB) regulation.
A helping hand
RDR truly changed the face of the UK financial advice process, with many advisers struggling to adapt at the time. However, those who did found that one of the key elements of their success came from their desire to embrace technology and all that it offered.
The same is true for those advisers
that are still trying to wrestle with the
likes of the packaged retail and insurance-based investment products (Priips) or IOM COB regulation.
‘There are a number of ways adoption of technology can make coping with the stream of regulatory change easier’
Karen Blatchford, head of international proposition and marketing, Old Mutual Wealth
There are a number of different ways that the adoption of technology can make coping with the regular stream of regulatory change easier. For example, the IOM COB regulation requires advisers to ensure new clients who are classified as retail investors only have exposure to retail assets.
Some platforms, such as Old Mutual International’s Wealth Interactive, can act as a safeguard by ensuring only retail assets are visible to select for new retail clients, thereby reducing the workload for the adviser and avoiding breaching the regulations.
Similarly, Priips, which was brought in last year in Europe, provides a good example of how a platform can make the advisory process much easier, with advisers able to access all regulatory documents under one roof.
For example, when an adviser is first choosing which solution is best for a client or reviewing an existing client’s portfolio, Wealth Interactive enables an adviser to select product level key information documents, while also obtaining fund level key investor information documents (Kiids) all within the same online journey.
Ultimately, this means an adviser doesn’t need to exit the process and go to a third-party site, slowing things down.
‘A platform like Wealth Interactive offers tools and services that help with goal planning, risk assessment and asset selection’
While some new regulations can be a headache in the short term, they often provide a benefit in the long term. One good example of this is that RDR required advisers to adopt a systematic approach to financial planning and portfolio construction.
Making sure the advice process is disciplined and recorded gives advisers the opportunity not only to make sure their clients get the best outcome but also to add value to their business by encouraging the build-up of a bank of clients who require repeat advice. This process is made that much simpler when an adviser chooses to adopt technology during every step of the advice process.
For instance, at the pre-sale stage, a platform like Wealth Interactive offers tools and services that help with goal planning, risk assessment and asset search and selection. Then at the execution stage, an adviser can apply online quickly and easily and benefit from instant validation.
Finally, post-sale, the system can be used for ongoing client management, enabling both advisers and clients the option to request valuations, access transaction and correspondence histories and send a provider instructions for transactions such as dealing.
Such processes enhance an adviser’s business by giving them the tools to keep carefully monitored long-term relationships with their clients. In addition these clients are going to have increasingly grown up using technology and will therefore expect their adviser to support its use.
Younger clients in particular will just take it as read that technology will be part of their advice experience and its absence will be questioned. For international clients, who may be in different geographical locations and time zones, the importance of technology to obtain instant access to information on their investments 24/7, regardless of location, is arguably even more important.
International advisers should not underestimate how crucial technology will be moving forward. Technology platforms can help advisers cope with regulatory change and thrive in the new environment. The ultimate impact of this is a future-proofed business, which can flex to the needs of its clients.
For more information about
Wealth Interactive visit our website: www.oldmutualinternational.com/wi
Those advisers who make the best use of new technology can lower costs, provide a better service and, most importantly, spend more time with their clients
If there is one thing clients want from financial advisers today it is transparency. They want to know how their money is invested, how their portfolio is performing and, perhaps most importantly, they want to know what fees they are paying. Ultimately, they want to see value for their money.
In a world in which fees are under ever-more scrutiny, advisers, asset managers and platform providers are increasingly looking at ways to deliver strong client service while lowering costs.
Delivering stronger client service is about spending more time with clients; and lowering costs is about spending less time on areas that are not of value to clients. Luckily, there are a variety of technology solutions that can play an important role in creating time for both advisers and clients, so they can spend it where it matters most.
‘There are a variety of tech solutions that can help create time for advisers and clients so they can spend it where it matters most’
Client relationship management (CRM) allows businesses to automate the high-touch service that can be delivered to clients. Firstly, it creates an aggregation of all client information in one place, be it fact-find information, client preferences or, of course, an aggregation of portfolio information from multiple providers.
With that single source of truth about their business and their clients, advisers can build automatic reminders to communicate with their clients, personalising the information based on their data.
Be it a ‘happy birthday’ phone call reminder or monthly automated review report, CRM software can help create a personalised, high-touch service without lifting a finger, giving the client a sense of importance and delivering scalability for the adviser.
An online portal can go a long way to help deliver both brand and value for a business by creating efficiency and engagement between advisers and investors. Within a portal, advisers can deliver the information and the service their clients are seeking immediately.
Advisers and clients have a secure and centralised place to discuss their financial position and also have access to a shared document repository, all while having the ability to chat and discuss different needs
This will reduce the time of running between appointments and collating the data for each review. It is always there, all in one place and available anywhere.
Most of the financial services delivered today, be it insurance quoting or investment executing, is driven by a technology platform. However, the required information to implement advice is still largely collated by paper fact finds and delivered to providers with paper application forms. Anytime there is paper there needs to be someone inputting this data into their relevant system.
Not only is this very insecure in terms of data privacy, it also slows down the process and creates a large margin of error. Worst of all it creates an enormous administrative burden on all involved, and clients don’t see any added value.
Delivering online applications and paperless account opening is faster, more efficient and more secure than sending reams of paper in the mail, and is a better experience for advisers, administrators and investors alike.
Managed accounts can transform advice businesses while creating investment portfolios that are dynamic and suitable to investor needs. Typically, investment portfolios require individual attention and manual rebalancing to bring them back in line with their strategy.
Even using model portfolios doesn’t fix the problem, as client portfolios in the same model will be out of line with the model depending on when they invest. Managed accounts technology is an elegant solution.
They allow discretionary managers to make
changes to their model and the platform
will update all invested client portfolios in a single transaction.
If the platform offers dynamic rebalancing, there will never be a need to rebalance, as weightings will float with the market and portfolios will always be in line with their model portfolio and with each other. And to save costs, platforms can aggregate trades, allowing all the transaction costs to be shared across all portfolios participating in the trade.
‘An online portal can go a long way to help deliver both brand and value for a business by creating efficiency and engagement between advisers and investors’
Saving and spending time in the right way
With some of the new technology available
to businesses, there are countless areas
of efficiency where time (and money) can
With more time available to businesses, more time can be spent with more clients.
The time can be better spent engaging with them and delivering the service they can really value and appreciate.
Social selling \for advisers
Nigel Danzelman, RL360 marketing services manager, \and Amber Williamson, CEO at Digital Willow, share \some of their insights into making digital media work \to help advisers connect with new customers
A recent survey by Accenture Research found 88% of advisers believe their clients are more knowledgeable about the investing process and the available product solutions than they were five years ago.
This ‘consumer revolution’, where clients are becoming more involved in their financial planning, has been fuelled by limitless information online and an explosion of client-focused technological innovation within the financial services industry.
‘A “consumer revolution” has been fuelled by limitless information online and an explosion of client-focused technological innovation within the financial services industry’
Tech is informing investors
Technology and social media is leading investors to expect ever-greater efficiency, transparency and accessibility.
Wherever you turn, those looking at the future of financial advice are talking about fintech and robo-advice as a way of automating, at least to some extent, some aspects of the advisory, research and client-servicing process.
Yet while recognising the need for technology to provide better service and analysis, many customers, particularly those with higher-net wealth, still value the personal relationship with you, their adviser. Finding a great financial adviser remains a critical stage in their purchasing process.
And while referrals may continue to be a key method of business acquisition for financial advisers, it would be savvy to prepare for the likelihood that those customers will undertake some online research about you before you meet them – or certainly before they take the plunge and sign on the dotted line.
According to a recent study, 65% of clients research potential advisers through social networks, and 86% use those networks to help in their buying decisions.
These are numbers you can’t afford to ignore, especially as they are set to increase. According to www.statista.com, the number of social media users worldwide will grow from 2.5 billion today to more than 3 billion by 2021.
Building the right profile
So, when prospects ‘Google’ you, what information are they going to be presented with? Chances are, the first page of Google search results will present your social media profiles prominently, and in particular your LinkedIn and Facebook profiles.
This is because Google and other search engines recognise the size and omnipresence of these social platforms, give them high domain authority and therefore rank their pages very highly in any search.
The most important of these channels in a business context is LinkedIn. LinkedIn is actually older than Facebook, YouTube and Twitter, and with nearly 600 million users worldwide, it is regarded as the leading business social media channel. And its parent company Microsoft intends on keeping it that way.
It’s also the channel with the highest concentration of high net-worth users. According to www.omnicoreagency.com/linkedin-statistics/, nearly half of LinkedIn users earn more than US$75,000 a year and are in mid/senior management roles. In short, most of your prospects will already be using LinkedIn, and are likely to trust what they read there.
So it’s key that your own Linkedin profile is fit for purpose if you want to stand out and present the appropriate image before you meet your prospect
Grow your network
You may ask if connecting with someone you don’t know that well is worth it. It is… The reason is because one day this contact will have a second or third connection that you would really like an introduction to. Afterall, we are all only six steps away from meeting Kevin Bacon.
Next step is to consider strengthening your authority by writing – or simply sharing – short and relevant posts that highlight your expertise and experience.
Don’t overdo it, however. Don’t be that person who ‘shares’ everything – stick to relevant topics and keep it professional. LinkedIn is primarily a business network.
There are increasingly sophisticated methods that larger advisory firms can use technology to automate the process of finding new customers.
Data-mining software can crawl through social networks to match clients with potential customers, which is a big time saver for advisers. But for those
with smaller budgets or
looking for prospects in
a very specific location or field, LinkedIn is useful tool to find potential customers.
A great way to start connecting with people you want to know is to join LinkedIn groups. Whether it’s a group for specific types of people – for example, ‘expats living in Dubai’ – or groups dedicated to a niche topic, start searching to find groups that are right for you and join them.
You can also use Twitter ‘trends’ tabs and hashtags to find specific topics of conversation.
Join the debate
When you are comfortable,
start joining discussions by
asking questions, gaining perspectives and commenting
with your own expertise.
Be careful not to sell your product or service – instead you are promoting your expertise and building your credibility.
Investors searching for answers to their specific questions online might be attracted to you as they read and trust your voice.
You can actively seek out prospects, too – you can locate very targeted audiences with LinkedIn’s advanced search. You can find people by job title, location, industry, education, current/past company and language. If you are a Premium LinkedIn member, you can segment even further.
There are also a number of paid advertising opportunities on LinkedIn. For instance, you can pay for your articles to be seen by high net-worth individuals, or you could place ads on profiles that click through to your website.
In fact, you can even use LinkedIn to send emails to specific audiences on your behalf. For more tips read this blog article.
At RL360, we’ve been aware of the power of social media for a number of years and see it as a key component of our marketing mix.
As the number of social media users continues to rise, we are confident it will remain a primary way to communicate with prospective and existing customers well into the future.
‘As the number of social media users continues to rise, we are confident it will remain a primary way to communicate with prospective and existing customers’
Troubleshooters who’ll \save you a fistful of dollars
Sagari does the rules, regulations and IT stuff so you can get on with the business
Legend has it that Doc Holliday was asked by a journalist if he really understood the rules of poker. “I know how to win at poker,” said the gunfighter. “I don’t have time to learn the rules.”
Many a financial adviser would echo Holliday’s sentiments. They are good at their job. They know how to win and how to make their clients win. But they are hamstrung by a raft of rules and regulations concerning not just their core business but security and the use of social media.
They are also highly reliant on their software. They need it to work but, like Holliday, they don’t have the time to discover how it all works.
Unlike Holliday, they can’t just ignore the rules. Nor, tempting though it may be, can they pull out a six-gun and threaten the IT consultant who is spewing jargon at them.
Click on video above for further insights
And that’s why so many financial advisory businesses now depend on Sagari for complete IT services and support.
‘We understand the jargon but
we don’t speak it’
Speaking your language
We are here to help companies who want to focus on their business, not the technology, or the intricacies of GDPR and other financial regulations. We understand the jargon but we don’t speak it.
Our clients typically have one to 50 workstations, few go above 100. They rely on their computers, network and internet for daily operations.
They turn to us because:
• We know GDPR. We will take care of your GDPR data protection, cyber essentials, IT security and compliance. Sagari is ISO27001 accredited, which means automatic peace of mind. We take security very seriously. Most of our clients use a specialised line of business application to run their business and they rely heavily on that software being operational.
Compliance and cyber security are vital to ensure GDPR and regulatory requirements are covered to protect your business from a cyber attack and fines of up to 4% of annual turnover or €20m, whichever is greater.
• There is one hand to shake. We handle all aspects of your technology, including hardware and software management, vendor relationships for your internet connectivity, compliance, data back-ups, cyber security and maintenance renewals. We focus on your IT, so you can focus on your business.
• Prompt response time. We know how important time is to any business. We pride ourselves on responding and working on a ticket within 20 minutes at most.
• Online crime protection. We offer the industry’s first commercial solution to detect compromised credentials in real time on the dark web. We search the most secretive corners of the web to find your compromised credentials before they are used for identity theft, data breaches or other crimes.
• Ransomware protection. We guarantee
to pay you up to £750 per device if you
have to pay the hackers’ ransom, if our software cannot stop or rollback your ransomware attack.
• No long-term contracts. We run monthly rolling contracts, so you’re not tethered to us and we must earn your business each and every month.
‘We understand what’s important to the industry and the people in it’
Sagari has been working with financial advisers and businesses for many years, so we understand what is most important to the industry and the people within it.
This means our services and knowledge are specialised to address the industry’s most pressing needs and problems, including GDPR, cyber attacks and business continuity, to name a few.
Sagari understands the financial advisory industry. We were awarded the Best IT Service Provider accolade for 2018.
Many clients turn to us because their current system seems to hinder business more than it helps. They know that computer downtime costs money.
Some would like to enable their employees to work remotely. They need to be certain their data is always backed up and secure.
They want to be confident they are compliant for GDPR and other financial regulations. Above all, they want an IT
partner they can trust who will add value to their business.
If you tick those boxes, then Sagari is likely to be a very good fit for your business.
To speak with one of our specialists, contact us via email firstname.lastname@example.org or call us directly on +44 273 855765.