Client engagement strategies have not advanced at the same pace as other developments in the industry, says platform provider Praemium, posing a challenge for financial advice businesses.
In a presentation at IMAP’s InvestTech 2017 conference, Praemium head of distribution Martin Morris said the industry is “letting clients move further and further away” by failing to improve the ways they interact with clients.
“Technology is significantly changing how we run our businesses. If you asked clients to reflect on how they engaged with their adviser 10 years ago to how they do it now, and mapped that to the significant change in technology, I’d argue it hasn’t kept pace,” he said.
“Just by an intuitive mathematical equation, that means our clients are moving slowly and slowly away from us. It’s like a slow-burning death.”
Mr Morris pointed to data from ASIC that shows the volume of the investible population seeking advice hasn’t notably increased in around eight years.
“In 2009, ASIC did a study which found only 20 per cent of the investible community uses an adviser – that figure has not gone up in any drastic way,” he said.
“For all that technology is doing, we aren’t seeing a fundamental change in the amount of consumers that see us as a profession – we aren’t seeing a massive amount of change in our referral networks, and this is a really worrying statistic.”
Mr Morris cautioned that client demographics are changing, and advisers need to move with them.
The company is looking to expand its services for financial advisers.
The FPA has developed a new SOA video toolkit to guide members.
“All advice should be regulated in a similar way”, a financial services firm has argued in its QAR submission.
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