Creating the service model of the future

The fallout from the Royal Commission will force many advisory practices to make important changes to their service models.  

Increased regulation, an overhaul of grandfathered product commissions and closer scrutiny of ongoing services fees could well become the new reality in a post Royal Commission world. 

Client service is the key

The key, in the future, will be for practices to have a client-centric service offering – and to deliver that offering efficiently and cost-effectively. 

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Increased regulation will put upward pressure on pricing margins. And simply passing that extra cost onto clients will not be sustainable in the long term.

There are various ways in which technology can help unlock these efficiencies and enable advisers to create more lean, profitable and client-focussed service models. 

Speed up advice

First, technology should rapidly speed up the process of preparing and delivering advice. Having spoken to many advisers, the typical turnaround time to produce a comprehensive statement of advice (SOA) can take many hours. 

Based on adviser feedback, the typical ‘pain points’ in the process include duplicating data entry, running multiple systems (which fail to talk to each other) and spending volumes of time on document formatting. 

These non-value-adding tasks add nothing to the strategy development nor do they enhance the client’s experience; yet they take up such a disproportionate amount of time. 

But new technology will automate those tasks. We are already seeing data become more openly available. The software of the future will not only collect client data from all the relevant sources (including superannuation funds, investment platforms, bank accounts, credit cards and loans) but will arrange it in a logical manner. 

Once data is captured and arranged, advisers will simply select the relevant strategies and products they wish to recommend and the software will produce the SOA at the click of a button. 

The time saved will enable advisers to focus their time and energy on doing what they do best – providing high-quality strategic advice and building stronger client relationships.  

Ongoing service

Secondly, technology can greatly assist in the provision of ongoing advice. It is no secret that the Australian Securities and Investments Commission (ASIC) is closely scrutinising ongoing advice fees and the level of service being provided in exchange for the fee. 

In short, the regulator wants to see that firms are providing tangible services that are not only being offered, but delivered. 

New technology can systemise the review process. Online client portals will rise in popularity. Through their portal, clients will have all their financial information at their fingertips. They will book appointments and update their information online, giving advisers real time access to their client’s financial position. 

Armed with the latest information, advisers will be able to provide up-to-date financial advice as their client’s circumstances change and evolve.  

Client engagement 

Finally, new technology can enable advisers to better engage with their clients. 

For example, technology might better enable advisers to conduct cash-flow modelling directly in front of their clients with live simulations. Clients will see the short and long-term impact of making certain decisions and better understand the trade-offs. Should we fly business class or economy, send our children to private or public schools, salary sacrifice or pay off the mortgage? 

After all, these are the questions that matter to clients and technology can better facilitate these more meaningful conversations. 

Our industry is undoubtedly experiencing rapid change. But beyond the clouds, there is a rainbow of opportunity for firms who prepare and adapt now. 

Vincent Holland is a co-founder of Plutosoft, a financial planning software and practice management program.




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