Ahead of the Adviser Innovation Summit 2024, gold partner Padua Solutions’ co-CEO and co-founder Matt Esler said it is vital for advisers to collect data throughout the advice process.
At the summit, Esler will explore the transformative power of data in financial advice businesses and how advisers could use data to make strategic recommendations and maximise value for clients.
The first step is to collect the clients’ personal and financial information at the discovery and fact find stage and enter it into their CRM. This is followed by setting up the clients’ investment management system using the investment portfolio service and entering information about the clients’ investments and platforms.
“The investment management system connects through all the platforms and gives the adviser an aggregated view of their clients’ financial situation, as well as multiple accounts per client and multiple clients per client group,” Esler said.
The data provides advisers a view of their demographic trends such as their age, the suburbs and postcodes they live in, and their income trends (including gross income levels over the long term).
In addition, it includes information on the clients’ investment allocations, superannuation, and pension funds, as well as their investment strategies. By understanding the clients’ current situation, advisers can make informed decisions about future investments.
“The next step is where I want to take my clients in the future,” Esler said.
“If my client is currently in an old and expensive platform or investment strategy, I might decide to move them into something that aligns with the cost-benefit analysis they’re looking for.”
Harnessing data to understand the investment strategies available to clients could lead advisers to operate a more profitable business, Esler said.
Padua recently released 880 financial planning strategies into their software, which can achieve different beneficial outcomes for clients.
“It’s about how the adviser’s recommendation and implementation of investment strategies can benefit the client in proportion with cost. Benefit minus cost equals value,” Esler said.
“If you can increase the benefit by knowing and understanding a range of strategy options that are available to a client, you can grow value without changing the cost of your advice.”
For example, if an adviser charges $5,000 to make 10 recommendations that equates to an increase in benefits over the course of the next 12 months of $20,000, they would have delivered a value of $15,000 to clients.
However, by using data and technology to understand which strategies their clients are eligible for, advisers could increase the benefit from $20,000 to $30,000.
“Advisers would have increased the value of that advice from $15,000 to $25,000 without changing their fee. That’s the power of data.”
Technology could also help advisers make recommendations around financial planning strategies within regulatory and legislative parameters, Esler said.
“For example, to qualify for the age pension, the client needs to be a certain age and satisfy some criteria including the incomes test,” he said.
“If you earn over a certain amount of income or own a certain amount of assets, you may not qualify. Technology can enable advisers to assess whether their clients are eligible for the age pension or other strategies, which is critical to maximising the beneficial outcomes for clients.”
Having access to a database that contains research on investments and platforms, as well as the benefits of those strategies could help advisers make informed decisions, produce advice faster, and reduce the cost of advice.
“Advisers could make advice more affordable and accessible to more Australians and service more clients with this efficient business model,” Esler said.
Commenting on the partnership between Padua Solutions and the Adviser Innovation Summit, Esler said the event aligns with the company’s focus on innovation, particularly in relation to how technology helps advisers create value.
“This focus on innovation is important in the advice sector so we can produce a positive outcome for both advisers and their clients,” Esler said.
“The summit offers a great opportunity for advisers to hear from different product and service providers as well as their peers about what they’re doing differently and how they could change what they’re doing to make a positive difference.”
To hear more from Matt Esler about why data is the new oil and how advisers could use it to boost service delivery and profits in their practice, come along to the Adviser Innovation Summit.
It will be held on Tuesday, 4 June at Telstra Customer Insights Centre Sydney, and Thursday, 6 June at Zinc at Fed Square, Melbourne.
Click here to buy tickets and don’t miss out!
For more information, including agenda and speakers, click here.
