When to automate advice, and when not to

This article is part of
Guide to the future of advice

When to automate advice, and when not to
Credit: Tara Winstead from Pexels

Nowadays it is not uncommon to hear the words ‘hybrid advice’ after the uptake of technology during the pandemic and the likes of M&G Wealth launching hybrid advice businesses.

“In a hybrid model, a convenient digital experience lets advisers focus on the life planning, coaching and arguably some of the most tangible parts from a customer perspective,” says Simon Binney, business development director at Wealth Wizards, an advice tech provider.

For example, a client could go through a largely automated triage process and complete forms online, while recommendations are given in an online or face-to-face meeting.

Binney also cites a Wealth Wizards client where hybrid advice technology enabled them to reduce three legacy tools used in the retirement and pensions process to one, as well as suitability and review letters being reduced to three hours.

“This has resulted in a much swifter, smoother process for both client and adviser, with a 100 per cent compliance trail.

“We achieved similar efficiencies with another large wealth management client, where we reduced the total at-retirement process down from 35 to 11 hours. We were also able to reduce suitability report writing, down from six to seven hours to just 40 minutes.”

Striking a balance between tech and human interaction

Digital experiences should be used where they are more convenient, says Binney, whether from an accessibility and time point of view, or something simple such as capturing basic personal details.

“Take providing your address. It is easier to do that online, with a postcode finder or pre-population from your web browser, than giving it verbally. By removing friction and distractions, you can get to the heart of great financial planning quicker and have better conversations from the off.”

Binney adds that clients can access automated and digital systems when it is convenient for them, which is likely to be outside of a typical advice company's business hours.

Although there is no shortage of new technology promising to transform how advisers do business, Heather Hopkins, managing director of NextWealth, says the consultancy’s research highlights lack of integration as a stumbling block.

“If systems can’t work seamlessly together, efficiency goes out the window and often more time, not less, is spent trying to carry out basic functions. Advisers who want to use technology to improve efficiency are prioritising systems that can work together, and we believe this trend will only increase.”

Sam Turner, a consultant at Altus, says that another challenge is in pension transfers. “The process of gathering information relating to a customer’s pension assets remains, to a large extent, manual. It can take six weeks to retrieve information from a ceding provider.

“If this can be automated, then we’re looking at significant gains in operational efficiency among advisers, and hopefully a lower overall cost of pension consolidation being passed to the customer.”