Cutting-edge tech for financial advice firms

Financial advice practices are implementing an array of different technologies to run their businesses more efficiently. The message is, if you haven’t already started digitising your firm, there’s no time to lose. 

One way to think about tech for financial advice firms is to break it into two different buckets. There’s tech to deliver advice more effectively and then there’s tech to improve the way the practice is managed. First, let’s take a look at innovative ways to deliver advice. 

Paul Moran is a specialist SMSF adviser with Melbourne’s Moran Partners Financial Planning. He has developed an interactive, cloud-based fact finding tool called iFactFind. This is a more accurate method of storing client information compared to paper-based methods and the information can be easily updated. 

The software includes a goal-setting function and a risk tolerance questionnaire and it will take clients about 40 minutes to input their details the first time they use it. Once their info is in the system, clients are prompted to update their details before meeting Moran and his team.

The tool also helps advice firms meet their regulatory obligations to keep complete and accurate records of their current and former clients. 

“iFactFind helps advisers know their client and deliver advice that’s appropriate for people’s circumstances,” Moran explained.

Financial advisers are increasingly making use of robo-advice tech, which allows them to offer a more cost-effective option for some clients. 

Nigel Baker, managing director of boutique private wealth firm Arch Capital, is one. He has recently built and implemented Scientiam, a low-cost digital advice tool designed to help advisers serve clients who can’t afford comprehensive, personal advice or who just are not ready for full-service advice yet but still want to be more engaged with their money. That includes millennials and people with low account balances, as well as clients who no longer fit the firm’s parameters for an ideal client.

“A lot of clients don’t need full personal or complex advice. But they still want a relationship with a financial adviser. We couldn’t find a cost-effective solution that caters to this need. So we built Scientiam to solve this problem, originally for family and friends and clients with lower balances and also intergenerational clients,” said Baker. 

Clients get access to the technology for $9 a month, investment costs are on top of this and depend on the customer’s needs. The cost to serve 50 clients using Scientiam is around a few thousand dollars a year versus $100,000 a year to serve the same number of clients using the traditional approach.

“Scientiam helps us to maintain regular contact with clients and offer a great service but not at a cost or distraction to the team. The technology releases the advice team to focus on where they add the most value: taking care of more complex client situations. The advice industry needs to stay relevant and meet the needs of the next generation. If the industry doesn’t create a solution for intergenerational clients, we risk losing them in coming years,” he warned.

Since developing Scientiam, more of Arch Capital’s clients now refer their children to the practice. 

“We have also engaged some family groups in a deeper, more connected way. Many of our staff and their families have also opened accounts, as they can now use our services without the need for a complex statement of advice,” Baker said.

It’s also an option for older clients who are no longer economically viable for the firm to service.

“After many years of loyalty, some clients don’t really need our services anymore. In the past, we would have reduced the fee for them, but this doesn’t make sense for us because the cost to serve them is too high. Scientiam allows us to offer a lite service so clients still have contact with us but at a lower fee and service level. Clients are happy and we feel good. While our fee is lower, so is our cost to service so economically it works.”

Online investment adviser and fund manager Stockspot has updated its goal tracker investors can use to set investment goals such as buying a house, retiring comfortably or paying for their kids’ education.

“Giving clients clear, easy-to-understand guidance every day helps them course correct when needed, which gives them more confidence they will achieve their goals,” said founder Chris Brycki.

“The goal tracker also enables our clients to have deeper conversations with their advisers or accountants about their broader financial goals. Our hands off, automated experience is designed to give clients a safe and consistent investing journey and save advisers the time and hassle of managing portfolios for their clients,” he added.

Helping clients, especially retired ones, manage their cash is an essential part of many advisers’ work. Joshua Fileti, a senior financial adviser with Synergy Private Wealth, uses CashDeck to help clients manage their cashflow.

 “I can see how much money they need to live on and work out a plan for funding their retirement.”

BETTER PRACTICE MANAGEMENT 

Client service aside, financial advice practices across the nation are exploring a swathe of digital tools to help them be more efficient and effective.

Many have switched to online diaries to manage their time. Moran uses Calendly to manage initial meetings, review meetings and follow-up meetings. 

“We were concerned some of our older clients would struggle with Calendly. But they have really taken to it, along with digital signatures we collect through Hello-Sign. It only takes five minutes to introduce the systems to the clients in a short coaching session. Now, more than 85% of clients self-select their appointments. We have linked this with Zoom so clients can choose how they want to interact with us,” he said.

Moran uses a range of practice management tools to simply workflow, including WorkSorted for CRM, which also links to Calendly meetings.

Rather than Calendly, Fileti uses Chili Piper, a free service, to manage his time, which suited him when he formed his practice. 

“You don’t want to spend too much money on subscriptions when you start a business. Now my business has critical mass, I could use something else and pay a subscription. But Chili Piper is simple and it works. I just send the link to a client and they punch their details into my diary. That’s it. I don’t like to over complicate the process.”

Fileti uses Mailchimp to send marketing material to clients. He says with this software, more of his emails end up at their intended address rather than in the junk folder, which was a problem with a competitor software to Mailchimp he used to use. 

“People are reading our emails, which I can tell through the open rates and other stats.”

Wealth Planning Partners’ director, Amanda Cassar, relies on Microsoft Azure products such as Team and Planner for practice management.

“We have two team members in the Philippines and these tools are great for collaboration. Our local team works from home one day a week and using Planner means we’re always up-to-date. “We are also rebuilding our

Network Attached Storage for additional internal file storage and security. The rest of our tech stack includes DocuSign, LastPass, Lightyear Docs, Malware Bytes Privacy and XPLAN,” she said.

ADVISER INSIGHTS

It’s worth taking into account the lessons learned by advisers’ who have implemented tech into their businesses  

Overall, Baker said now’s the time to fully embrace the digital opportunity as clients were likely going to be demanding it from their adviser. 

“Technology is moving fast and many clients will soon demand a digital experience similar to the one they’re used to receiving from other tech-based companies. Technology can improve client relationships and give advisers the ability to impact the lives of thousands rather than just a lucky few. Spend some time researching the options and understanding how they work and can fit into your processes.” 

Similarly, Moran said the best idea for advisers who don’t know which tech to explore next is just to start the journey. 

“It’s easy to spend days, weeks or months procrastinating about software because of the desire for one piece of software to do it all. This just isn’t reality. It’s more valuable to identify manual processes and to look for solutions to these problem. It’s a bonus if the software you choose can solve more than one problem.”

While simply getting started is good advice, Cassar said it’s important to do proper due diligence before choosing the right tech for the firm’s needs. 

“I’ve heard many stories about advisers jumping on the latest nd greatest innovation and finding it didn’t suit their needs, so they had to go back to their original software. Check out group chats for advisers and ask for their experiences. There’s no one-size-fits-all solution for businesses, so it pays to do homework before wasting time and money on tech that doesn’t suit your needs.”

Finally, Brycki recommended seeing technology as an enabler, rather than a threat. 

“Otherwise, your business will become Blockbuster rather than Netflix. We’ve found technology provides an enormous opportunity to deliver a better client experience, improve objectivity and reduce mistakes. Most importantly technology can empower clients to achieve their financial dreams more confidently.”