New technology that provides advisers access to real-time financial information about clients will be a game-changer for compliance and engagement, says software provider Midwinter.
Speaking to ifa following the Xero/ Midwinter roadshow in Sydney yesterday, Midwinter managing director Julian Plummer said cloud-based technology was fundamentally changing the financial advice process.
“Being able to have this real-time information on your client is a real game-changer and also enables the adviser to meet the ‘know your client test’,” Mr Plummer said.
“No one can ask an adviser ‘do you know your client?’ when they have real-time cash flow information rolling in and you know where they were last Friday.”
Mr Plummer was referring to the 'cashbook' product offered by accounting software provider Xero, which he said was an antidote to problems associated with attaining sufficient information about clients in initial meetings.
“Advisers have struggled historically with the client fact-find, and clients see it as homework so it never gets done sufficiently,” he said.
Mr Plummer said that while, previously, advice was “static”, advisers are increasingly moving to “constant, moving and evolving models” – a development he described as a “watershed moment”.
Xero managing director, Australia, Chris Ridd told ifa that his colleagues colloquially refer to the technology as the “truth serum” because it allows accurate information about clients to be accessed.
“When filling out traditional information fact sheets for their advisers, often clients will either lie or simply won’t know the answer, leading to a lifetime financial strategy based on inaccurate information,” Mr Ridd said.
“All the changes in the industry in terms of FOFA and commissions being banned and the move to fee-for-service means an adviser has to get as close to their client as possible – well, nothing is more sticky than being able to say, ‘this is where your spending has been and here is a spend management and budgeting plan’,” he added. “That’s why you are seeing financial planners interested.”
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