- Advicetech is set to transform consumers experience of financial advice, with a real time, lower cost and more engaging experience.
- Bionic advice and the collaboration between advisers and robots will continue to evolve.
- Financial advice is set to be what consumers expect, and to meet their expectations rather than disappoint.
Silicon Valley is internationally recognised as a hub of technology innovation and in a recent study tour, I explored innovation that would shape and change the delivery of financial advice in Australia.
What is clear is that Advicetech is set to revolutionise advice.
It will forever change the way advisers assemble their advice solution, creating a breakthrough for the advice industry, and for most Australian consumers who currently do not seek advice.
This is because the line in the sand between man and machine has changed, and it is no longer a case of man against machine but rather, man with machine against man without.
What this means for consumers is that financial advice is about to get a whole lot more instant, interactive and enjoyable. And this change is happening now, evidenced by the way advisers are now embracing AdviceTech and changing their service delivery.
In the recent Netwealth Advicetech Research Report, more than 200 advisers were surveyed on their current technology habits in 26 aspects of their business - they were asked what technology they used, how often they used it and their technology plans.
Budgeting tools, digital marketing, online service tools, digital signature tools and virtual meeting technology were all identified as technologies set to emerge in the next 18 months as mainstream technologies used by most advice practices.
Take for example, cash flow, budgeting and account aggregations tools. These tools are used by either clients, advisers or both to help calculate a client’s true financial position and give them transparency and accessibility over their financial accounts.
These tools are already used by 43% of the advisers surveyed, facilitating financial literacy and control and empowering Australian consumers about their finances. While the stat sounds large, 60% of advisers said they only use these tools for less than a quarter of their clients, so there is considerable scope for these tools to have a much larger impact.
Other AdviceTech tools set to hit mainstream by 2020 and forever change financial advice, specifically how advisers engage with their customers:
- 59% of advisers will use online virtual meeting technology, up from 52% today. Financial advice will become more accessible with tools that allow online and mobile meetings and collaboration. This has the potential to facilitate the spread of advice to a younger generation more used to this form of communication and in regional and more remote areas.
- 59% of advisers will use online consumer self-service tools to help streamline the initial consultation with clients. These tools help advice practices capture client information used in the fact finding and risk profiling process, speeding up the process whilst empowering consumers.
- 78% of advisers will use digital signature tools, up from 34% who use them now. Digital signature tools offer advice practices authentication, non-repudiation and integrity benefits, and are used in industries such as software distribution and financial transactions to detect forgery or tampering. For consumers, they make advice more instant, more relatable as decisions can be made and implemented straight away.
Another trend from Silicon Valley which will impact advice in Australian is the continuation down the path of bionic advice. This will see robots and humans working together in a collaborative manner to deliver a seamless service. It will also see new entrants in the wealth space.
The Netwealth AdviceTech survey found that financial advice services that rely on algorithms, automation and big data sets are likely to be the big disrupters to the financial advice industry. Consumers should expect to see services like managed accounts, robo and scaled advice to be the norm. In turn, this should provide a better experience and offer greater affordability and value for money to customers.
Netwealth 2017 AdviceTech Report
The report paints a picture of how technology is currently being used in the dynamic and evolving advice industry and provides insights into key areas of focus, must-have, high adoption services, and technologies that are regarded as disruptors, but are not yet being adopted.
The threat of tech giants is considerable
When you consider research1 that suggests 73 percent of millennials in the US would be more excited about a new financial offering from Google, Amazon or Apple than from their own bank, you feel the weight of potential competition to the wealth industry as a whole. Tech companies are winning hearts and minds. They are fun and engaging and they pose a significant threat to the financial advice industry if it does not lift its game.
Companies like Alibaba, an international marketplace company and Apple Bank, a consumer banking company, are bringing a fresh perspective to financial services using the knowledge they have gained from their technology capabilities and the data it has given them on consumers.
In this way, the Australian financial advice industry needs to move on from providing automated services and labelling this as their technology play. In this context, robo advice needs to be more than investment services and more like Chabot finance coach tool, Penny.io which gives users personal finance app at their fingertips.
Consumers experience of financial advice will change as advisers use it to deliver real time and any time access to their advisers and financial information. This creates lower costs, an engaging and enjoyable experience and real time finances.
With the help of technology, consumers are going to get what they expect from advice – good service, an engaging and enjoyable experience and real time finance solutions.
More resources to help grow your business
Get insights into must-have, high adoption tech services advisers currently use and plan to adopt.
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