Ian McKenna: Clients prefer ‘screen’ advice to face-to-face


I recently spent an intense three days in California at an event called Technology Tools for Today – or T3, as everyone abbreviates it. This is the main annual conference focusing on technology for US advisers.

During the show I witnessed an awesome array of new technology to support advisers building relationships with clients. There was also compelling evidence to suggest advice firms should significantly rethink how they use technology and their operating models more generally.

MoneyGuide Pro presented some interesting research it had undertaken with consumers aged between 50 and 70 into how they prefer to receive advice. The study, which included biometric testing, scientifically measured clients’ emotional reactions to different parts of the advice process.

The results strike at the heart of conventional wisdom in our industry. Indeed, it found clients would rather deal with their advisers via a screen-share than at face-to-face meetings. I can hear a chorus of readers shouting “rubbish” already. But these findings come from real consumers engaging in the advice process and are measured using the latest scientific techniques.

Interestingly, political lobbying group Cicero recently produced a UK study that came to a similar conclusion. It is foolish to ignore multiple studies with similar results.

MoneyGuide Pro also presented evidence of the volume of new business that can be generated using a process it has been piloting. Potential clients complete an online factfind, which generates an initial financial planning analysis that the consumer is then encouraged to validate via an adviser. In one case, a firm created new investment opportunities in excess of $100m in just four days.

Elsewhere, Fidelity presented research findings comparing the income profitability and job satisfaction of so-called e-advisers (firms who have embraced technology) with those still operating using more conventional methods. It found that e-advisers have higher assets under management, average client balances, income and job satisfaction than their traditional counterparts.

Users of FundsNetwork would be reduced to tears if they saw what Fidelity and its subsidiary eMoneyAdvisor deliver to American advisers. In fact, watching its demonstrations at the conference, I became increasingly angry at how poorly UK advisers are treated in comparison. This has to change. Fidelity has the technology within its global business. Why won’t it bring it to the UK?

eMoneyAdvisor also demonstrated a brilliant prototype of virtual reality financial planning, which really had to be seen to be believed. It honestly felt like something off the holodeck of the Starship Enterprise. And it was certainly not alone in demonstrating some stunning technology.

For example, Riskalyse showed a one-click fiduciary solution, which can rebalance a client’s portfolio, including all the trades, in seconds. It seriously made me question whether the current FCA client money rules are actually operating against the interests of the consumer.

Outdated regulation

While the regulator deserves praise for the way in which it now embraces technology, T3 showed what would be possible if we had not been having to build digital solutions around a rule- book designed to address advice processes in the 20th century.

Technology adoption has been constrained in our industry because we have tried to come up with digital versions of analogue processes rather than designing for digital from scratch. Based on what I have seen, there will be enormous benefits for consumers if the FCA can tear up Cobs and all the related regulations, and produce new rules for the world-leading fintech community in the UK.

Of all the valuable messages from T3, one resonates more than any other: technology will not replace advisers but it is probably the end for those who do not use it.

T3 has been one of the most productive conferences I have attended in a long time, reinforcing much of what I had believed about the future of advice.

It was great to see so many agile minds looking to reinvent advice in ways that can better serve consumers. Space does not allow me to go into all the great offerings I saw. However, you can read my blogs on the event at DigitalWealthInsights.com.

I have already told conference host Joel Bruckenstein I will be attending the 2018 event in Fort Lauderdale. I would wholeheartedly recommend it to anybody interested in the future of advice. And not just in the context of what is possible using technology but from a broader perspective too.

Finding a way to deliver the services a growing band of digital consumers young and old are seeking cannot be done by sticking to a 20th century approach. We need 21st century solutions for today’s customers, now.

Ian McKenna is director of the Finance & Technology Research Centre