Readers may remember that last year I was smitten with the enthusiasm and passion displayed at the Finovate conference. Put simply, Finovate 2013 was a great event and I had high hopes for this year but, like many highly anticipated events, this did not quite match the hype.
Certainly it was good – and with over 1000 delegates it was about twice the size of last year’s conference – but it did not go quite as smoothly and it lacked some of the buzz of a smaller conference. Also for me, there were fewer presentations that focused on my area of interest: financial planning.
That said, there were a few notable presentations and, to be fair, the conference is internationally focused and highly geared to banking, where the use of advanced technology is a given. Financial planning tools that originate overseas therefore tend to be designed for continental models where banks are also the dominant financial advice and planning provider.
eyeOpen
A good example of this was provided by eyeOpen, who presented at last year’s Finovate and who I highly rated. In essence, they were offering fully regulated advice for the Dutch mortgage market. I was impressed by the company and was therefore not surprised when later in the year they were sold to Aegon in the Netherlands. Having made a tidy sum, the owners of eyeOpen have reinvested in another product that they have referred to as a “virtual guardian angel for financial advisers”. Called AdviceGames it offers an “academic and interactive omnichannel performance monitor” together with “an online customer loyalty store”. After their presentation I had a chat with the two directors, Diederick and Rosali and, while they were enthusiastic for their new venture, I remained a little confused as to where it would fit. Perhaps this is because it is less developed than eyeOpen or maybe I am just less savvy about the market it aims to support (and customer loyalty is a big issue). Based on their track record, however, it is probably a product to watch although it is not a solution to the UK’s advice gap – the Holy Grail for me.
As I have said in the past, technology is ideally suited to filling some of the advice gap, but there are dangers. A firm that is thinking of using technology has to be sure that the proposition is financially sound, but also that the end result is Fos-proof. Now, I do not mean this in a disparaging way. The Financial Ombudsman Service has an important job to do, and on most occasions I believe that it gives sound judgements, but I have been an expert witness on two cases where I believe that Fos got it wrong and the problem with technology-based solutions is that, if it is judged wrong in one case, it could be wrong for all who followed the same route. It is this systemic risk that scares most firms away from technology – but I wonder, is the fear real? In this post-RDR world, all firms try and ensure that all their clients get an identical level of service and advice; I know as a non-executive director of a major IFA business that this is something we strive to achieve. So, if compliance departments are so keen to ensure consistent outcomes, surely the use of technological solutions is a force for good.
MoT
I was therefore very pleased to see Money on Toast presenting at this year’s Finovate. You may remember that I reviewed MoT last year and, while I was genuinely excited by their proposition, I did have issues with some of the outcomes recommended by its automated advice. MoT gave a very slick presentation at the conference and, although I would still question whether full advice can be delivered in seven minutes, it certainly looks promising. MoT was founded by Charlie Nicholls who saw an opportunity to provide advice to the millions of consumers who have been abandoned by their financial institutions or advisers. In other words, it looks to fill the advice gap.
When I spoke to Charlie and Catharine Dodd after their session I was told that the glitches I had identified last year had been fixed and the system was now robust. If so, I believe that MoT offers enormous potential. Like the other firms presenting, MoT was using the opportunity to showcase its wares and attract partners – either as investors, clients or on a joint-venture basis. If the new version lives up to the promise, MoT deserves to succeed and I wish it well.
Dr Peter Williams is an independent business consultant and chartered financial planner
