Part of the series of retrospective articles celebrating this month’s ten year anniversary of IFA Magazine. Sue Whitbread asks how important has technological change been in the development of the financial advice and planning profession and whether it can continue to drive improvements into the future.
Since IFA Magazine first appeared on the scene back in 2011, the use of technology in financial advice has increased beyond recognition, from back office support systems right through to client-facing tools.
According to Nick Eatock, CEO of intelliflo, since the Retail Distribution Review (RDR) in 2012 there has been a huge transformation of focus on the efficiency of adviser firm operations underpinned by technology. Evidencing this with some impressive statistics, he comments ‘According to our latest survey, in the last 15 months alone, two thirds of advisers have adopted new tech that’s enabled them to become more efficient. New technologies have helped firms grow, scale and ultimately serve more clients, widening access to financial advice – a great win for the UK consumer. Our figures show that, through technology, advisers are servicing up to 41% more clients and generating 27% more ongoing revenue.
Eatock goes on to say that, “the way that advisers’ clients have used technology has changed significantly – the number of our Personal Finance Portal users increased by 85% between January 2020 and January 2021. Advisers have changed the way they interact with their clients and we’re expecting this to mark a permanent shift in the way that advisers operate in the future – for example, advisers can now reap the benefits of working remotely, helping them to become more agile and efficient without comprising on the value they deliver to their clients.
But he sees greater improvements coming down the line as take up increases. He comments, “We look forward to seeing advisers embrace more uses of technology in a new era for financial advice. As a technology provider, it’s important that we don’t just provide the technology but that we help advisers make the most of it, leaving them with more time to focus on their clients and their business.”
Anthony Rafferty, CEO, Origo has strong views on how technology can further transform the business of financial advice. “Ten years ago,” he reminds us, “the Apple iPad was only a year old – technology has advanced exponentially since then. Now we can use technology so much more effectively in our businesses and that is going to increase over the next few years. Financial services can be seen as lagging behind other industries when it comes to its use of technology. Sometimes that lag has been down to the fact that financial services is one of the most complex and highly regulated markets in the UK, which can make it more difficult to introduce the technology that’s needed – but not impossible.
“In other instances, the industry simply hasn’t moved on and could immediately improve its efficiencies and its service to its clients. Onboarding of clients is one example – where some providers still want paper forms completed and faxed (yes, faxed!) to them. Compare that to Amazon Prime, where you can order one afternoon and receive the goods the following day and it’s easy to see why to consumers’ eyes financial services can look archaic in its practices.
But he sees that things are already changing, commenting “Post the pandemic, which has accelerated the use of digital technology, we see a rapid uptake of technology in general in the financial advice market (and within financial services per se), making use of API, open-banking and open finance opportunities. There will be automation of a growing range of financial services operations – including through the implementation of AI – taking the industry forward in leaps and bounds, some small, some large but all to the ultimate benefit of both the industry and the consumer. We believe there are exciting times ahead and we are here to help the industry make the most of them. Finally, it’s congratulations to everyone on IFA Magazine for reaching 100 editions and 10 years serving the IFA market. A magnificent achievement and milestone.”
Damien Rylett, CEO of Brunel Capital Partners believes that of all the changes which have taken place, perhaps the biggest is the obvious one, technology. He comments “Technology drives almost everything now and the successful advice and planning firms are the ones that have embraced it and built a client-focussed proposition using the best tech. The use of portals, aggregation services, electronic signatures etc. have all enhanced the client experience and driven efficiencies with firms. Great tech used to be available to the few but now with new players in the platform market for example, smaller firms can access this.
“This is the area I see developing over the next few years; firms with a mindset for ‘growth’ and looking to develop their own in-house investment solution, custody offering and other tools. Now that the financial barriers to this sort of stuff are gone, why give it to someone else when you can do it better yourself?”
IFA Magazine columnist and marketing guru, Faith Liversedge goes one step further, asserting that “technology is going to change everything” for advisers. In her view “it will reduce the cost of basic advice and planning and make it available for people who can’t currently afford a professional adviser which means more people will seek it out – that’s great of course. But at the same time the existing client segment will have more and more complex financial needs, so they’ll have to see a real planner. Therefore the firms who do well will blend technology and advice in an innovative way to meet the needs of both audiences.”
“The most efficient way of doing business”, she says, “will be to combine the best of tech and the best of a personalised, human service. This means an adviser is no longer someone with a phone, they’re part tech company, part media company, part advice company. Attracting, communicating and servicing these different segments will require a brand new way of thinking.”