In the age of increasing regulatory and administrative burdens, it can be tempting for advisers to focus on one distribution channel to keep the business structure as simple as possible. However, multi-channel distribution models are key for the future and platforms should be supporting this writes Richard Goodall, Distribution and Marketing Manager, Parmenion.
The regulatory burden faced by the advisers and wealth managers of today is significant. According to the latest survey from the Personal Finance Society, regulation and compliance costs have been identified as a key threat to adviser business success for the fifth year in a row.
As a result, advisers can find it hard to find the time and energy to review their existing distribution models. However, as an adviser, it is important to frequently do just that and make sure that your chosen model is suitable for the business. It is also important not to forget the future and to remember that what works for you now, may not necessarily be right for every client you gain in the future.
It’s a digital world
Consumers are increasingly looking for advisers to broaden their propositions and offer more digital services, but this task can seem daunting. People of all ages want to be able to engage with their financial providers through a variety of channels, which includes being able to monitor performance and engaging with their investments and their adviser, online. Platforms seem one obvious source of support here.
Many advisers are turning to their platform providers to help them with their digital communication and to access new digital distribution models. The right platform should enhance your client outcomes rather than complicate them. It should streamline the process of recommending and managing client portfolios to free you to do what you do best. Offering advice to and building relationships with your clients.
A good platform should also be able to support your brand by personalising not only the online experience, but also client facing documents to reinforce your business identity.
Robo vs traditional advice models
Robo-advice is certainly the buzzword of the moment. There is no question that there is a role for automated advice. To make advice more inclusive, the industry needs to develop alternative distribution channels that potentially appeal to a new generation of clients who have, for whatever reason, not previously engaged with advice services.
In its current guise, automated advice is perfectly positioned for those people who have simple investment needs or who are not looking for a holistic financial review or planning service. It can offer a personal recommendation, which differentiates it from self-select or execution only strategies. As an adviser, we believe there are many reasons for you to consider introducing robo-style services to enhance your business.
It gives consumers a choice as to how they access services, can help appeal to a broader range of clients, and can be successfully integrated into a traditional service with the potential to streamline the process and improve client interaction.
By no means does technology replace the need for other forms of communication. The need for human interaction remains. We are concerned that the term robo-advice implies that there is no role for human interaction with clients when shaping propositions powered by this kind of technology.
We think it is possible to blend smart technology with different degrees of human interaction to create bionic rather than robotic advice. This gives the client control over the level of personal engagement and automated processing that they feel is best placed to meet their needs.
Several advisory firms are using our Interact tool (launched in 2014) to reshape their business and operating models in order to ensure that their clients can chose how they interact with them.
Finding the right balance
Many advisers now recognise that building the right client journey is the key to their business success. By providing access to tools which add a digital communication or advice element, platforms can help enable you to deliver advice through a series of streamlined processes. This ensures that you and your clients can choose how you work together.
The right platform partner will offer significant ongoing support, including listening to you and tailoring existing propositions to meet your needs.
You are the right person to choose how best to work with your clients. Finding the right platform should simply help you along the way.
About Richard Goodall
Richard is Distribution and Marketing Director at Parmenion. He has a proven track record of helping retail and institutional distributor businesses deliver change through technology and is responsible for leading the Parmenion marketing and sales strategy.
Richard is a well-respected industry figure with previous board appointments at Ascentric and 1st Software/IRESS. Prior to joining Parmenion, he has been Managing Director of UK Business Transition at SEI, a global provider of institutional and private client wealth management solutions.