The Retail Distribution Review (RDR) in the UK demonstrated the central role that online adviser platforms can play in helping to transition an adviser’s business model towards more efficient, repeatable advice. This is due to the rigorous process and client reporting that it enables.
More and more we are seeing offshore platforms aiding international advisers with the same processes. While the pace of change differs across global regions, it is inevitable that online platform adoption will continue to increase, perhaps until almost all new business is through platforms in the international advice market.
‘Online platform adoption will continue to increase, until almost all new business is through platforms’
The viewpoint that technology will have a positive impact is shared by the vast majority of the international adviser community. A recent survey, commissioned for Old Mutual International, of 180 respondents from across the UK, Europe, Middle East and Asia, found that only 2% of advisers believe technology does not help their business.
The survey also showed that advisers are placing more business via providers’ online platforms. A sizeable 41% of international advisers are currently placing new business directly through providers’ online platforms, with the majority of advisers (55%) believing there will be an increase in the use of online platforms in the next 12 months.
While these results show that platform adoption in the international adviser community has some way to go, little by little the merits of doing business using an online platform are starting to shine through.
Indeed, the advantages of using platforms do seem to be widely understood.
For example, when advisers were asked what kind of benefits platforms could bring to their business, 76% said that technology makes it more efficient to manage clients on a daily basis, helping with tasks such as valuations, dealing and withdrawals. Ease of portfolio management (62%) and client online access (54%) were also seen as very beneficial features of providers’ platforms.
All of this indicates that we may be at something of a watershed moment. Forward-thinking advisers are seeing the benefits of an online platform to build value in their businesses by aiding repeatable advice to segments of clients and to provide a better experience and more consistent outcomes.
Advisers are also supporting shifting customer expectations, which have moved so fundamentally that a digital presence is now an essential requirement.
The growth of online banking – and mobile banking in particular, which is set to overtake online banking in the UK in 2019, according to financial services analyst CACI1 – may mean other financial sectors have to step up to cater for the 24/7 access that clients require.
In the UK, much of this growth is now driven by older consumers in rural areas and coastal towns. However, this also translates to highly mobile international investors. For them, technology can prove to be incredibly efficient, by streamlining the decision making process and getting them closer to their investments at their convenience.
The wider industry backdrop is the growth of fintech markets globally, and the possibilities undoubtedly have a long way to run. Today, the main success story for integrating fintech into advice – so called ‘robo advice’ – has been in the US.
Hybrids of robo and face-to-face financial advice have emerged as investors increasingly require the convenience of technology alongside the intimacy and personalisation of advice in person. This is a model advisers are well placed to replicate globally.
The typical view is that, as technology becomes more and more ingrained in everyday life, we lose the valuable face-to-face contact that can provide better results and, by and large, is favoured by clients.
I believe that the adoption of online platforms by advisers can actually have the inverse effect, by allowing greater automation of services to free up more time to spend face-to-face with clients.
There are now systems able to significantly reduce the amount of time taken to carry out a wide range of tasks, including identifying and agreeing client objectives, performing risk profiling and suitability assessments, researching and selecting products and executing transactions.
The end result is that advisers’ core competencies, such as customer service, behavioural finance and building clients’ trust, come to the fore as the most important attributes. It is still a people business – but a clear technology strategy will be an enabler of business growth.
Source: The future of digital banking: how changing behaviours will impact the channels your customers use, CACI