Let's get digital
Why the introduction of ‘Digital’ is actually imperative to the longevity of financial advice.
Off the back of Adviser Innovation, our team at Midwinter have had many enquiries from both dealer groups and IFAs about the introduction of ‘digital’ into the advice space.
This is a topic which hasn’t seemed to have lost its vigour - regardless of the wide level of discussion it has already provoked this year. There are still numerous advisers who continue to express concern about ‘digital’ advice (of which robo-advice is a component), which aims to allow clients to be able to undertake simplified and highly automated strategies without the input of a financial adviser.
Advisers may fear this – perceiving it as an opportunity for their work to become redundant. They have been flooded with a variety of reasons as to why ‘Digital’ will be ‘good for them’ or contrastingly, why ‘it will render their services useless’.
Like a number of the other innovators in the space, I believe that ‘Digital’ advice is definitely not going to push the role of financial advisory into futility. But I’m not just of the benign opinion that it is simply yet another positive thing for the industry either.
Rather, when it comes to ‘digital’ advice, I believe that advisers are being provided with a not only a new way of interacting with clients, but a service offering that will soon become the preferred, in fact one of the required ways for certain clients to initiate financial advice.
In other words - without implementing some degree of ‘digital’ advice, financial advisory services in the future are more likely to become impractical. Why? Because as ‘digital’ increasingly becomes the method by which so many day to day tasks are carried out, if the sector does not keep up with the norm, it will become outdated.
Research reveals that the new generation of clients seeking financial advice are not merely excited about the idea of self-enabled advice, but they are demanding it and have already begun to employ this self-seeking attitude in many other industry sectors.
Take travel for example – the idea of millennials stepping into a travel agency and expecting an agent to organise a simple vacation from beginning to end is rapidly becoming obsolete.
Rather, these individuals enjoy the process of sifting through websites and phone based apps in order to source their own quotes for accommodation and flights. They would see little value in employing a travel agent to undertaking the entire booking process for an uncomplicated holiday.
When things do begin to become more complex however, customers know they have the option to step it up a level. When it comes to booking more complicated vacations employing a travel agent to help with the finer details, customers will benefit from the agents knowledge while saving time, money and frustration. Customers can rest safely in the knowledge that if anything does happen goes wrong with their itinerary, they have a formal arrangement with a knowledgeable organisation to help smooth things out.
If we are inclined to entrust our more complex vacations to ‘somebody in the know’, how much more so would we be motivated to do the same with our finances?
Has the self-enabling of booking travel made travel agents obsolete? Absolutely not.
Upon the revolution of their industry, travel agents who have embraced the digital age have leveraged the technology that has transformed tourism to find new and unique ways to interact with their target market.
Those who have successfully proven their value have continued to flourish - capitalising on the sales channels that the digitalisation of tourism has provided to ensure that they are the first port of call when their services are required.
I passionately believe that much will be the case for financial advice.
Asking advisers ‘not to fear’ digital advice delivery doesn’t seem to quite cut it for me.
It isn’t a notion that simply requires tolerance, but rather enthusiasm!
I would beseech advisers to be excited that digital technology is finally hitting our industry, as it has in many other sectors and to get on board with fact that their next generation of clients are not merely going to express interest in an interactive advice process - they will flat out demand it. If you cannot provide them tools to be able to do so they will simply look elsewhere.
At Midwinter, we’d much rather that advisers sit in the driver seat when it comes to ‘digital’, positioning them as the providers of this service. This allows advisers to be the first touch point when escalation to phone based or face to face advice is required.
This is why we’re taking the lead in the Australian planning technology space by developing automated algorithm based applications for advisers, allowing them to provide a branded interface to clients where they can undertake simplistic strategies using their digital device of choice.
This digital framework is being developed with escalation points set in place to ensure that at any time during the digital advice process.
Adviser’s clients are given the opportunity to receive comprehensive face to face advice from the adviser providing the service, as soon as the complexity of the advice being sought exceeds the simplicity of the strategies provided.
We’re excited about creating a new means of financial advice delivery that will expand advisers’ service offering, as well as ensuring that the industry of financial advice continues to advance at the same pace as the rest of the ever innovating market place.
Julian Plummer, Midwinter
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