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Development focus: Don’t be afraid of getting digitally connected

Advisers and product providers need to embrace digital communications to deliver the best results to clients


A year after the FCA’s ruling that advisers must provide upfront fee information to clients, the body released findings that 58 per cent of advisory companies are still failing to offer clients information about costs straight off. 

This is testament to a deeper-rooted issue, perhaps not simply of insufficient transparency for clients but of barriers in communication between investment companies and advisers. This in turn creates challenges for advisers in sourcing all the information and collateral necessary to recommend the right products and services to clients.

Advisers are under increasing pressure to provide clients with a speedy and efficient, as well as transparent and personable, service.  It is the technological and digital tools and platforms offered by investment management companies that enable advisers to provide the best service. For advisers to connect better, investment management services need to be seamlessly digitally connected to provide the right information quickly.

To provide greater transparency and make services easier and quicker to access, investment companies must implement small digital innovations. Some examples include dashboards incorporated with their service offering, allowing advisers to share clients’ portfolios; and secure video links. Being digitally in touch with both investment managers and customers allows advisers to carry and relay information conveniently and on the go where required.

Competing with DIY investors

Also to be considered is the competition that such technology brings to the financial services industry. Digital tools that are designed to enable easier access and put control of financial affairs into the hands of the consumer are entering the marketplace at a rapid rate, as illustrated by the rise and popularity of self-investment tools offered by large providers such as Close Brothers and Axa.

Through the use of such tools, people are becoming DIY investors in droves, cutting the cost and fees associated with obtaining financial advice – albeit with much less regulatory protection. So to meet the changing needs of today’s investors and remain competitive, advisers must embrace and employ digital technology, which will also improve their services.

Effect of compliance

A core reason for the slow adoption of digital tools and channels by the financial services industry can be attributed to compliance. This quarter, the FCA is due to release its updated social media guidelines, aimed at monitoring and controlling interactions across these platforms. The necessity of checking and saving every tweet or post to ensure compliance requirements are met causes a headache for both investment companies and advisers.

But as the industry absorbs an influx of young advisers – who use digital communications channels as a matter of course, like the clients they are servicing – inevitably connecting over the internet will become another way of building lasting relationships.

Therefore the onus needs to be on advisers to demand that investment companies adopt digital services, thereby making information more readily available and keeping up with the requirements of new advisers and their younger clients.

These younger clients are accustomed to obtaining instantaneous, up-to-date  information so face-to-face contact with an adviser is not always a core priority. A digital offering from investment companies  allows advisers to work remotely or on the move, making interaction with clients faster and easier.

Small transformations

Digital tools have a lot to offer the financial services industry, to the benefit of both advisers and investment companies.

Although regulations still present challenges for the widespread adoption of digital tools when it comes to platforms such as social media, there are small transformations that can be made by advisers to help meet clients’ need for convenience and flexibility. 

These digital transformations can help in turn to improve client satisfaction and drive the bottom line for both advisers and the investment companies providing the products.

Peter Veash is chief executive of The BIO Agency 



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