There are still some in financial planning that deny the advance of technology. Or, more to the point,
that radical change will occur. Thankfully, they are a minority.
It is easy to forget how far we have progressed. At the start of the millennium, the typical adviser’s workload centred on valuations for portfolios. Our first research paper, published in 2000, showed it took an average of six hours to get valuations for a standard portfolio, and an elapsed time of some weeks. Naturally, the valuations were out of date long before the client saw them.
The introduction of platforms utterly changed things. Some advisers caught in a time warp were still justifying fees post-RDR for providing quarterly valuations. However, the majority got on with improving their propositions, charging for the crucial planning work, investment portfolios and meeting client needs.
Nothing stays still. At a conference on robotics last year, World Wide Web inventor Sir Tim Berners-Lee said: “If the computer can do it, the computer will do it.”
I can get a portfolio valuation on my iPad 24/7. It is no longer a chargeable deliverable for my adviser. The app also has an excellent cashflow modelling tool. What next? For me, it is about joined-up technology.
Many advisers conduct basic fact-find meetings with clients themselves. Such meetings are for gathering data the client has to search around for in desks and drawers back home. Surely it makes more sense for the client to do this online, feeding straight into the practice management system, rather than waste the time of a £250 per hour adviser?
The next meeting can then be a genuine discovery about the client needs and objectives, based on good data.
Data, of course, is the operative word. Big data and the General Data Protection Regulation will revolutionise the use of financial planning. This is where it gets interesting.
Work being done by Google’s supercomputer, DeepMind, can answer questions based on enquiries the search engine has received on any subject (and that is a lot). This will enable advisers or clients to answer planning and investment questions with some confidence.
The other player in this game, IBM Watson, boasts “it creates a comprehensive view of the client by delivering insights using multiple data sources inside the organisation and helps advisers service their clients in a more personalised manner.”
I suspect not many of you are looking to get in touch with IBM or Google any time soon but the impact of big data and artificial intelligence is closer than you think.
Already, banks such as Santander, NatWest, Barclays and UBS are launching robo or hybrid propositions. Most will employ algorithmic investment solutions. Banks have the data on individuals with regard to their money and how they spend it. With AI, they will be able to offer solutions and products in the style they like.
Is this a concern for the adviser? I do not think so – not for some time. However, clients will experience this in various ways with their banks. As such, it makes sense for advisers to employ technology wherever it can cut costs, improve offerings and reduce risks. After all, if the computer can do it, it will do it.
Clive Waller is managing director at CWC Research