With the rise of direct-to-consumer investment platforms in the wake of the RDR, investment advisers could be forgiven for seeing technology as an ominous threat to their livelihoods.
A recent study entitled ‘The Future of Employment’ looked at more than 700 occupations and calculated a probability factor, ranging from 0 to 1, of each job becoming automated during the next 20 years. Financial advisers were placed firmly in the at-risk category with a score of 0.58.
Simple pointers
In the fullness of time that may well be true but here and now technology actually represents a huge opportunity for advisers. The RDR has created a mass market of investors who may not be prepared to pay for an ongoing service but who will still need access to advice periodically. These people will still marry, buy houses, have kids, inherit wealth, get sick – and when they do they will still want a trusted adviser to turn to. When this happens, a few simple pointers on the smart use of technology can help to make sure your firm is at the front of their minds.
Given the rapid erosion of the binary advised-versus-non-advised distinction, many forward-thinking advisers and their firms are looking to the concept of a direct-to-consumer proposition with dip-in, dip-out ‘full’ advice as a way of servicing client needs and retaining a book of business.
Dip-in, dip-out
Dip-in, dip-out only really works if your firm is as focused on the ‘out’ as it is on the ‘in’. Self-serve clients who begin to look for advice at a particular point are understandably going to turn to their platform providers in the first instance. So offering a branded platform of some sort – either through a white label or a full platform proposition – has become a basic requirement.
In order to enhance the experience of your non-advised clients, think about providing thought leadership and information in the form of blogs and podcasts. If your non-advised clients see you as a knowledgeable window into the financial world, they will be more willing to make the transition to ‘full’ advice when the time comes.
Make interaction easy
Simplicity is key. Clients do not want to have to dig around your website for hours trying to find an out-of-date contact number for an adviser who no longer works there. In fact, they may not want to pick up the phone at all. A younger generation may prefer website chat messaging or online video calls and all channels should be offered to make it as easy as possible to interact.
When they do ask for help, make sure that whoever answers knows all about their journey so far – there are few things more frustrating than having to repeat your last half hour’s work for someone else to re-key. Integrating your communication channels with your platform is entirely feasible and will pay dividends on the customer journey.
Adam Jones is senior consultant at Altus
Embracing technology: Key points
Speak their language
It may seem obvious but today’s Isa newbies may well be the high-net-worth investors of the future. Generation Y use different media to get their information and it is important for advisers to use these channels too. Advisers need to build their brands with social media, provide useful content via these channels, and make it easy for people with a budding interest in investment to hear them.
Listen
Social media may have started out as a broadcast medium but it’s rapidly turning into a very effective listening tool. As your business builds a following of Facebook, Twitter and LinkedIn users, remember to tune in and see what they’re talking about. This can be a very effective way of targeting your messages and even your proposition.
Learn
Take this one step further and tools are beginning to emerge that enable firms to understand individuals in great detail from their online footprints. Developing sophisticated profiles of potential investors without the overhead and cost of a personal fact-find could open up great opportunities for investment advisers. People in Generations X and Y are, on the whole, more than willing to share personal details to make their lives cheaper and easier. For these clients, everything you need to know about them is almost certainly available to you, so make a point of tapping into it.
Automate
Eventually even the advice part of the investment journey will fall prey to automation – computers are already performing much more complex activities and it’s just a matter of time before the price point for machine learning hits our industry.
Those advisers who recognise this trend early have a huge opportunity to exploit technology and develop new, and potentially much larger, revenue streams from it. For real-life examples of this, look no further than Wealth Wizards, Nutmeg or Money On Toast. While it’s still too early to say whether any of these will be the next dotcom success story, they stand a much better chance than those who believe nothing can replace the human touch.
