The last few weeks have seen the launch of an unparalleled number of new communication devices designed to change the way in which consumers access information.
Microsoft announced its new slate joint venture with Hewlett Packard, and Lenovo, the now Chinese-owned firm that took over IBM’s PC manufacturing business, introduced a stunning range of innovative devices. And while Google delivered its Nexus One phone, possibly the most exciting launch so far was Plastic Logic’s Que (pronounced Q) an e-reader with wi-fi and 3G connectivity, one-third of an inch thick and weighing just 17 ounces.
All this may yet be capped by Apple who has a major show scheduled for January 25 in San Francisco.
Ironically, the key issue here is not about hardware but about software, as the latest changes in global digital evolution are doing for paper what the iPod and iPhone have done for music delivering a revenue model that works.
All over the world, the internet has cannibalised advertising revenue from traditional print media. Newsrooms for what were once weekly or monthly publications are having to produce real-time news feeds with no extra staff, all the while having their content hijacked by aggre-gators who then supply their online advertising.
The subscription model being developed for new e-reader devices offers the next stage in a digital revolution, without which the prospects for news media organisations are terrifying.
There is a great deal the financial advice community can learn from all this. We too have a commercial model that is broken and we deal with the same consumers who buy newspapers and magazines.
Like it or not, the retail distribution review will leave millions of policy-holders as orphans of advisers who can no longer afford to offer them face-to-face advice and who have failed to provide a more automated service.
Many advisers are currently looking at how they will service clients after the RDR but I come across very few who are defining alternative methods of offering advice to those clients who will become uneconomic when commission is no longer an option.
This will inevitably mean millions of consumers will find themselves without affordable financial advice.
The IFA community as a whole may find it unpalatable but the life companies have a regulatory obligation under treating customers fairly to look after such clients. To meet TCF obligations, it is inevitable that more and more life offices will need to put in place mechanisms to ensure policyholders have an active advice arrangement. Where they find the investor is not being actively serviced they will need to provide additional customer support.
It is essential that in formulating a post-RDR plan, adviser firms consider their light-touch proposition for dealing with those customers it will be economically unviable to offer face-to-face advice after December 2012. It can be argued that this should be prioritised as it may take longer to get customers used to working in new ways.
Such propositions will almost certainly involve the use of financial planning tools and remote meeting software. If there is an upside to the recent cold weather it must be that millions more people have found how practical it is to work from home using products such as GoToMyPC and LogMeIn.
The conferencing equivalents of these products, plus the right package of financial planning and client management software, should enable advisers to offer support in ways that remove many of the traditional costs of doing business in person.
My own organisation is seeing more life offices, platforms and large adviser businesses looking to identify the right financial planning tools and software to support such new services. We have introduced a service to help such companies define their precise needs and then compare the various suppliers to identify which best fulfils these needs. We have already identified 30 different suppliers of financial planning tools, and the list is growing. We are now looking at how an abridged version of this service might be supplied to small firms.
It is increasingly apparent that the financial advice practices really set to grow over the next 10 years will be those that can find ways of best communicating with large numbers of consumers via the new technologies those people are choosing to adopt.
This creates massive opportunities for new forms of advice and guidance, and with RDR making financial advice as we know it the exclusive preserve of the rich, it could be the way ahead for most clients.
So far, True Potential is the only organisation in the financial services industry to show me their iPhone application and more firms need to deliver equivalent services.
Perhaps the future of advice for some firms will mean selling a low-cost web-based service to which consumers can subscribe and which provides a better understanding of their finances together with an aggregated summary of their financial position. Others may want to follow more traditional routes, but getting your share of this important market is likely to be crucial to the future economics of adviser firms.
Ian McKenna is director of the Finance & Technology Research Centre