Established advice firms have a lot going for them: credibility, loyal customers, technical capability, stable revenues and professional connections. But if these firms were starting their business from scratch today, would they design it to be exactly as it is now? I think not.
Legacy issues can make it harder for established firms to innovate and improve. Such issues include out of date technology, poor processes, and lack of client feedback and staff training. Sometimes the problem is down to leadership. As someone smarter than me once said: “What got your business to where it is today won’t get it where it wants or needs to go in the future.” The best businesses have focus on cont-inuous improvement.
Much is written about digital disruption and the risk artificial intelligence and automation poses to traditional face-to-face advice but no one knows exactly how it will manifest itself. My guess is that, for the foreseeable future, most affluent people will still want personalised financial guidance or advice delivered by real people.
However, instead of the bulk of interactions being in person, using manual processes supported by a myriad of tools and systems, they will become digital, supported by humans, mainly virtually. Face- to-face meetings will become the exception, not the norm, and reserved for the most complex or higher value clients.
If I was starting a firm from scratch, I would create every interaction, process and output to be delivered digitally. I would ensure clients could have as much human interaction as they want but mostly via virtual means, such as webchat, email, telephone and video.
Such interaction would include data gathering, viewing and discussing financial education material, quantifying financial goals, collaborating on financial scenario modelling and reviewing recommendations.
A good example of digital and human interaction in practice is keeping clients well organised financially. Helping clients get their records in order gives them a tangible sense of clarity, control and confidence. It is also necessary to enable advisers to give advice.
Few firms charge for this service – and I think that is a missed oppor-tunity. Indeed, while some clients will be willing and able to upload their data into a digital portal, others will be prepared to pay to have someone visit their home to help.
Another example would be making video the default way clients and advisers hold formal meetings. I would not offer physical meetings to avoid needing expensive city centre offices and the need to travel. If client demand for physical meetings really was strong, these could easily be held in one of the new style city centre flexible meeting spaces.
Small firms like Money Honey, Investor Profile and Fiveraday have a digital first proposition, delivered by real human advisers, while well-funded new entrants like eVestor and Netwealth offer a restricted digital advice service, supported by video-based human advisers.
You do not need to change how you work overnight but if you do not disrupt your business, someone else will do it for you.
Jason Butler is a financial well-being expert, author and speaker. You can find him Tweeting @jbthewealthman