Providing advice from home

The COVID-19 pandemic is impacting almost every aspect of our lives with one of the biggest being our workplace situations. Governments globally have ordered citizens to work from home if possible to help slow the spread of the virus. 

While financial advisers fundamentally rely on personal relationships and face-to-face meetings with clients, they too have had to start working remotely. 

A recent Money Management survey found that, since the virus was declared a pandemic in early March 2020, 53% of advisers said client enquiries were higher than expected.

When asked what support they required to carry on businesses for another six months an overwhelming 93% said a ‘more facilitative approach from regulators’, followed by ‘more support from dealer groups’ (27.6%), ‘better technology’ (24%), and ‘better communication’ (17%).

The survey also found that 87% of advice practices were dealing with the pandemic by phone consultations. This was followed by online contact through emails/chats (80%), video consultation (53%), and 20% were carrying on with face-to-face meetings if clients required them. 

Advice Regtech chief executive and co-founder, Samantha Clarke, said the more contemporary advisers had already shifted over the last year to more remote and video meetings, and that this would only increase due to the COVID-19 situation.

Around a quarter of advisers, Clarke said, had already set up to transition to a more remote environment with their customers. 

COMMUNICATION TOOLS

In line with the survey, Clarke said there was a lot of demand for advisers as clients were worried about their portfolios, given the ongoing market volatility.

“Advisers need to over-communicate with clients even if it’s just to listen to client concerns,” she said. 

“They also need to remain accessible and available in a remote way to their clients and do whatever they can to make it as efficient as possible so that they can get advice out faster.”

Clarke said there were a myriad of video conferencing tools advisers could try if they had not already such as Zoom, Google Hangouts, and WebEx. Getting back to the basics was also a way to continue communications with clients such as a letter in the mail. 

Agreeing, founder and chief executive of Advice Intelligence, Jacqui Henderson, said cloud-based platforms such as Zoom would be needed to help with face-to-face meetings with clients, and Slack for collaboration. 

Henderson noted that the limitations of the ‘old world of advice’ was having to model strategies on a whiteboard physically face-to-face. 

“There’s no digital tools that advisers have that enable them to have really constructive conversations to explain strategy,” she said. “We have digital tools that advisers can use with clients to co-create plans and it gets used along with Zoom.”

Henderson said there were not many clients these days that did not have video capabilities and for those that didn’t it would be a struggle. 

Centrepoint Alliance group executive for advice services and solutions, Kate Anderson, said her organisation was recommending Microsoft Teams for collaboration, live chat, and meetings then Skype and FaceTime for client meetings, and Microsoft Sharepoint for files. 

Anderson noted that advisers needed to make sure the hardware or software they were using ensured client confidentiality with a secure cloud-based storage platform. 
She also stressed that over-communication was key during these uncertain times. 

WealthO2 managing director, Shannon Bernasconi, said while the new working from home environment was disruptive to all business models, advisers who had not used any Microsoft or Google cloud-based products previously would find it even more difficult.

Bernasconi said advisers needed to identify the critical applications they needed to continue their service and if those applications were inaccessible via a cloud platform they needed to work with their tech provider them to access those programs remotely. 

QUICK PORTFOLIO CHANGES

Many advisers would likely struggle with the volume of client concerns, Bernasconi noted, and advisers needed to make sure they were getting communications out to all of their clients to help calm the process, as well as then managing one-on-ones effectively to avoid panic and financial detriment.

Bernasconi added advisers needed to keep in mind the pace they could make to change a client’s portfolio.

“Where technology in some legacy architecture will fail an adviser right now is when you have to go to each individual client to affect the same change and you can’t efficiently make that change for today’s market. Everyday is a different market and it’s about being able to efficiently and compliantly make that change,” she said.

Bernasconi said advisers needed to use technology that was efficient, able to implement change on a bulk level, automated bulk records of advice (ROAs), and implementation needed to be intraday not end of day.

“It’s about the end-to-end workflow efficiency, the intraday aspect, and the bulk aspect across many lines,” she said. 

“Ultimately it’s about ensuring the ability to bulk communicate to clients about those changes and what’s going on and the ability to customise changes to their narrative and to customise specific client needs within that bulk group.

“In this environment you have to take into account specific circumstances more than in the past given the current market volatility and many clients are concerned about their pensions and so forth.”

COMPLIANCE

Bernasconi noted that the technology advisers would be using at home needed to be compliant and that the provider of the portfolio management should be enabling that compliance automatically and be integrated with trading platforms.

She said some advisers used a customer relationship management (CRM) type tool to generate records of advice for changes and portfolios but also keyed trades clients had agreed to onto a separate platform for execution.

“That would be a situation where the technology they are using is not integrated or, not a workflow that helps the speed of the change,” she said.

“It would be the onus of the adviser to generate something in one place to keep files, and then separately trade on a second application. Those kinds of models are ones that, in the past, may have been seen as satisfactory. 

“But when you’re trying to make changes to all clients and reduce implementation drag and maintain compliance, those bespoke, separate, and staggered processes can cause risk, slowness in implementation in client portfolios, and in this market volatility that’s certainly not a good outcome for clients or advisers.”

Clarke said that licensees that had moved quickly to introduce efficient compliance practices and audits were in a good position.

“These compliance reviewers already work either from home or in a flexible way. The ability to use compliance software enables advisers to be more efficient and will allow them to get their advice out faster,” she said.

DIGITAL SIGNATURES

IRESS chief executive, Andrew Walsh, said it was important to have digital data or records and give a holistic view of the advice business, where it was sitting and how files were checked as advisers would not be able to rely on manual files. 

Walsh noted digital signatures would also be an important tool to push through advice files.

Pointing to the Royal Commission recommendation on advice fee consents and independence disclosure, Walsh said it was an important piece of workflow that needed to be end-to-end, starting from clients approving a fee authorisation, then to advisers and licensees, and then through to third parties. 

“We have been tying together the functionality through digital signatures through trusted assisted blockchain that will allow platforms to confidently rely on that information on fees or to refute fees,” he said.

However, with Parliament now not sitting until August due to the COVID-19 pandemic, implementation dates are uncertain but IRESS is pushing ahead on implementing its digital signature strategy.

“We acquired a blockchain platform in January and we already have a client portal, and fee consent documents for clients,” Walsh said.

“The client will provide a digital signature that will flow into the blockchain and platform providers can pull off from that blockchain as evidence that has been signed by the client, track that to the client and confirm that hasn’t been tampered with in the transmission. 

“So that model across lots of different parties is unique and a great use for blockchain and needs to be delivered in a way that doesn’t require licensees to have different implementations and providers. Separate workflows will be the killer as there is already going to be a lot of work for advisers to be chasing along with getting client authorisation. 

“If they have to implement it in different ways or have to scan documents then that’s going to be very problematic, costly and inefficient. It’s important to pull all parties together so there’s an end-to-end single unified solution.”

A respondent to the Money Management survey said: “If a facilitative approach is too hard for the Government to absorb, here is one simple thing they could do – allow encrypted digital signatures from software such as DocuSign and ban some companies’ unrealistic policies that every document should be wet signed and/or physically posted”.

Anderson agreed and hoped Treasury or the Australian Securities and Investments Commission (ASIC) would provide some relief or relaxation methods around client consent in the coming weeks.

She noted some advisers were asking clients to print out documents, signing them, scanning them, and emailing it back, or via emailed consent. Anderson said not many advisers had an approved digital signature method. 

She said advisers needed to keep file notes that specifically detailed what consent was provided, how it was provided, and when it was obtained. 

However, Anderson stressed that some forms only allowed for wet signatures such as opt-in fees, renewal advice arrangements, and binding death benefit nominations. 

“The Association of Financial Advisers and the Financial Planning Association are trying to work with Treasury and ASIC around how to obtain client consent for say annual renewals without a physical signature and hopefully some relief around that over the coming weeks will come through to make it easier for advisers that don’t have tech capability to do digital signatures. 

“We’re trying to push for clients to do opt-in renewal of their advice arrangements verbally rather than having to do written consent.

“Some of the ongoing fee arrangements that was meant to be effective 1 July are not going to happen given Parliament does not sit until August as some are still in draft.”