Speaking to FTAdviser, chief commercial officer Bruce Ely-Johnston described AdviceBridge as a platform that helps advisers automate all of their processes, allowing them to focus on the client relationship instead.
He said the hybrid advice platform, which mixes human and robo-advice, can undertake the tasks that an administrator, paraplanner and adviser can do.
“However, we know this step is far beyond what people are comfortable with and there’s always scenarios that can’t be completely undertaken by technology, e.g. comparing soft benefits of a pension,” he said.
“We believe there should always be human oversight and human emotions can’t be captured and incorporated through tech, hence the AdviceBridge system has been developed specifically to support advisers with their clients, not to replace them.”
Ely-Johnston said AdviceBridge reduces the time he believes it takes to onboard a new client from 35/40 hours down to under five and he said this time saving translated into an 80 per cent reduction in costs and a 70 per cent increase in profit.
He said: “At the heart of the AdviceBridge solution is an immensely powerful and intelligent advice engine which collects and analyses all of the client data before delivering the optimum solution and producing a review or recommendation report without the adviser having to lift a finger.
“In fact it's powerful enough to replace the adviser or paraplanner completely - although we know the reality that that wouldn't happen. However this demonstrates the efficiency of the system in that the adviser/paraplanner doesn't have to do the fact-find, research of current investments, analysis of what solutions e.g. wrap & investment product, what tax wrappers etc, nor write the recommendation report.”
Ely-Johnston explained all of these aspects were done by the software, including cutting processes, removing re-keying and therefore cutting out all of the manual time that an adviser or paraplanner would take in compiling, analysing and researching.
The platform claims to deliver the ideal solution available to the client, showing exactly how much they will save in terms of fees and tax.
In addition to this, the system provides both adviser and client a dashboard showing their "safe to spend" amount in retirement and what they can spend now, without the need of full cashflow planning.
Robo versus real
Discussing where this platform fit with the robo-advice versus real advice debate, he said: “A robo-adviser is simply an online investment service which typically asks you about 10-15 simple questions and then allocates you to a suitable basket of investments, which it then manages for you on an ongoing basis.
“Real advice involves reviewing a client’s current holdings, which could be simply just cash through cash, Isas, pensions etc, understanding their income, financial aims and then recommending how it should be properly structured.”
Once the plan is in place, the firm looks at which investments are best, reviewing fund managers, platforms and selecting the appropriate ones for the client.
“In terms of AdviceBridge as a hybrid – this is in reference to an automated system but with human interaction, basically being able to implement a real financial planning process through technology whilst keeping the human (adviser) as an interface with the client,” he said.
“What this means is being able to digitise the manual, time-consuming tasks, cutting out a lot of the human administration and research, gathering information, analysing client’s current holdings/portfolios, before recommending the right structure (wrappers, investments, platforms) and then producing a recommendation report that’s ready to present to the client.”
Ely-Johnston claimed AdviceBridge was one of the only systems offering this degree of automation and that it made financial planning more affordable for mass affluent clients, helping advisers become more profitable through the automation of processes for existing clients and through providing a new revenue stream from prospective ones.
Closing the advice gap
Ely-Johnston also said there are two elements as to how this can help close the advice gap.
Firstly, he referred to the actual cost as he said the typical cost of advice to a new client was £1500 and the cost of providing that advice was roughly 2/3rds of that, for example £1000 leaving a profit below £500.
“With the time spent on new clients being cut down significantly when adopting AdviceBridge this reduces the cost to under £500 and doubles the profit to over £1000. So where advisers found it unprofitable or barely worth the effort for such low returns would be where they drew the line i.e. had a minimum charging structure which hence creates a barrier to advice.
“If we assume this line is £100,000 in savings then this can theoretically be halved to £50,000 hence helping with those in the advice gap.”
The second part of how it helps is in the system's ability to provide an understanding of the benefits to the individual.
"A lot of prospective clients are put off by what they see as expensive costs for example the £1500 advice," he said.
“Typically, they approach an advisory firm to make an enquiry and one of the first things they will be informed of is the cost. There is no reference to the value at this stage as the adviser is unable to make this assessment and hence a large number of people walk away.”
He explained that the AdviceBridge system engages potential clients from the start, playing back to them what their financial situation is in a simple to understand format and displaying their potential savings from a tax and fees perspective.
“When a typical prospect can see that they could save £30,000 for example, just from having the right advice and saving in the right way, £1500 suddenly seems very appealing,” he added. “This then helps overcome the barrier to advice reducing the advice gap.”
sonia.rach@ft.com
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