If necessity is the mother of invention, then the lockdown has certainly driven the immediate widespread adoption of technological solutions by financial advisers, to stay connected with their clients.
With advisers, clients and the broader industry rapidly adapting to these changing circumstances, it may offer an insight into what the future might hold.
One of the key questions now is whether these changes will prove to be crisis-only measures or the catalyst for more fundamental change. Although we cannot know for definite at this stage, our sense is that these shifts are here for good.
So, what might this look like in practice?
Remote becomes the norm
Technology has played an essential role during this crisis in allowing advisers to stay in close contact with clients, who are facing everything from health worries to personal economic challenges and loss of income.
This trend is highly unlikely to go away.
Clients continue to value meeting and speaking with their adviser; however, technological solutions are in many ways much less demanding than a home or office visit.
An online video discussion, complete with graphs and other documents facilitated by screen sharing, could be a more coherent and, dare we say, three-dimensional conversation for a client than a face-to-face meeting.
Moreover, as adviser firms will typically have an older profile of client in comparison with the general population, plenty of older clients could prefer to continue with remote communications in the interests of their own health even after the lockdown is eased. As this continues, it may embed the use of technology in maintaining these relationships.
We also know that many advisers have onboarded clients during lockdown. This challenges the assumption that it must involve a face-to-face meeting (often at the client’s home), and it may actually better suit many prospective clients.
If this becomes the new normal, it could represent a significant shift in working practices, leading to a big reduction in travel and more efficient management of diaries, freeing up valuable advising time. And, it would drive forward the learning of a new set of valuable digital skills – especially in the optimisation of online communication.
Clearly though, there won’t be a one-size-fits-all approach to any of this. After all, there is no one-size-fits-all when it comes to clients.
Pre-crisis, standard practices varied between firms, with a wet signature required by some platforms and providers, often at different stages of the process.
Where processes have moved online, and where it can be demonstrated that this has been done safely, we would suggest that the case for permanent change is a strong one.
It may also be an opportune time to challenge some previously long-held assumptions – for example, that a wet signature is necessarily safer than a digital one, or that an annual client review should always be conducted face to face.
Clearly, some of these conversations need to involve the regulator. The industry will need to show clear consumer benefits and demonstrate the safety of processes and security of data.
In the case of signatures, it will be about demonstrating that it works as part of a logical, practical and well-documented client journey, something that Embark has been leading on.
Role of artificial intelligence
Having worked on some of the first financial services transactional software projects anywhere, I’ve learnt first-hand that it can take time for technological innovation to be adopted.
Discussions about artificial intelligence and its applications in financial services often focus on robo-advice or the use of big data by giant financial players.
Yet, just as the growth area in manufacturing is no longer robots but cobots, which work with and enable the human workforce, this crisis could spark a similar phenomenon with technology-enabled advisers.
In a clear connection with the current situation, the better application of technology could give clients a much faster and more focused journey.
This would enable advisers to focus on thornier, more complex issues such as difficult CGT calculations, for instance. There is a strong case for advisers to further embrace technology that could keep them ahead of the emerging digital advice and digital investment competitors.
The trusted gatekeeper
As a digital-first approach increasingly becomes the norm, the need for effective security to tackle the prevalence of hackers and scammers is clear. Sadly, but unsurprisingly, both seem to have stepped up their activity during the crisis.
By developing secure systems which combine best technology practice with the experience and human touch of advisers, there is an opportunity to become established as trusted gatekeepers.
This crisis may also prompt advisers to look at the integration of their technology across their business.
As effective platform technology sits at the centre of advisers’ propositions, we believe that it will have a valuable role to play in helping facilitate a positive change in this area.
Turning this into reality
For Embark this crisis has meant we’ve had to adapt quickly. The successful purchase of our new Advance by Embark Platform was completed entirely remotely, something we couldn’t have envisaged undertaking at the beginning of the year. We can therefore empathise deeply with advisers in this new journey. And, we know that it will be critical to talk to them and listen to their experiences and changing needs, and continue to invest in the lessons learned and incorporate them into how we work together, our approach and our ongoing technological development.
It has been a grim few months for most people, but we may at least be able to use this crisis as a catalyst for change, to help advisers improve their business efficiency and strengthen their relationships with their clients.
About the author
Phil Bungey is COO of Advance by Embark
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