Amazon's client service strategy could provide lessons for advice businesses in how to address the changing demographic of clients, guests on the latest edition of the FTAdviser Podcast have suggested.
The pandemic has seen the world change quickly and the ‘Amazonification’ of the client experience has developed as a result of it over the past two years.
Speaking on the podcast, Russell Andrews, global head of advice solutions for SEI's Asset Management, explained how technology has taken a leading role.
He argued that it was not a question of how financial planners and advisers replicate the business model of Amazon, as e-commerce is a different sector to financial advice, but instead how the industry can learn from the likes of businesses such as Amazon.
“I do think there are some principles that can be learned from the way in which they’ve gone about building their platform.
"Amazon has really put at the heart of their proposition things like convenience, things like transparency, the introduction of a community feeling, the ability to deliver insights to help people make good decisions,” he said.
“These are fundamental components that can be learned from and I think using technology to help surface those things is a way in which actually goes to augment the human to human relationship – certainly rather than replace it.”
He added: “It’s going to be a case of finding that real blend of how technology can add value, not necessarily oversimplify what is a fairly complex market in reality.”
Heather Hopkins, managing director at NextWealth, agreed client expectations have changed over time, but argued that nobody expects financial planning to become like Amazon and the immediacy of it.
“Nor would I think most financial planners want to work with clients who have that expectation,” she said.
“It’s really important to remember that financial planning is essentially a relationship business, it's about humans and the reason that clients value that relation with their financial planner is because of the trust they’ve established with them.
“We all trust Amazon to deliver the package when they say they will, that expectation is met, but that’s fundamentally different from that sense of financial security that you get from that individual.”
Hopkins added: “If you really look at what customers are looking for from the relationship with the financial planner, it's an understanding that they are doing ok, that sense of financial security and wellbeing.”
She argued that there are huge opportunities to digitise aspects of financial planning but stated the industry “should never lose sight of what needs to be digitised”.
Meanwhile, Andrews argued that technology, through elements of gamification, is a good way of doing that and providing the ability to learn and understand more about finances.
“Principally what is going to happen at some point is that when that wealth increases, the shift from a Robin Hood style of investing is going to diminish because investing your end-of-month surplus income is very different to having a significant pool of assets that you’ve inherited,” he added.