Innovating beyond technology

Advisers and dealer group heads from across the industry told their stories of innovation recently at the Adviser Innovation Summit 2016, showing that the process is about more than just gizmos and gadgets



Michael Heine, joint managing director, Netwealth


Grahame Evans, managing director, GPS Wealth


Ray Miles, executive chairman, Fortnum Financial Advisers

Ben Nash, founder and financial adviser, Pivot Wealth

Ask a room full of advisers what ‘innovation’ means to them and you can expect a chorus of all things digital. But for some of the industry’s biggest influencers, the meaning of innovation goes beyond that.

During the Adviser Innovation Summit 2016, which was held in Sydney and Melbourne in June, three industry members talked about the changes they are making to their businesses to keep up with client demand.

Netwealth joint managing director Michael Heine led the conversation during the ‘Adviser Spotlight’ panel.

MH: How do you deal with technology and innovation within your organisation?

GE: We are very big debaters in our group. We challenge everything to make sure we understand it inside and out. We look to see how we can either use, evolve or throw it out. So innovation, from our perspective, is being able to look and see forward and then consider what we can take in that process.

We’ve got a very young team. Innovation to us is not about technology. It’s about the whole client relationship and how we can improve things from the start to finish.

MH: I’m glad you said that it’s not just about the technical side. It’s all the business. Ray?

RM: I guess I am passionate about innovation but if anyone knows me, they know I know nothing about technology. We partner with some people who are really knowledgeable about technology and their job is to keep us ahead of the curb, and they do that pretty well.

My view is that this industry needs to change quite dramatically over the next 10 years. There’s a lot of stuff we’re doing to drive that change in conjunction with our practices, because they’re the people who give us the feedback.

BN: Being in the space and working with my clients, who are between the ages of 30 and 40, they basically demand that we work with them in innovative ways and technology helps drive a lot of efficiencies. It makes it easy to work with clients on their terms.

I love being able to tinker with things and improve on processes. Innovation is a constant journey, not just from a technology point of view, but how you can engage with your clients and how you can make it easier for them to do business with you and ultimately get the outcome they want.

MH: It all comes back to the customer at the end of the day. How are you innovating to improve the client experience?

GE: In my perspective, we’re moving from a ‘tell-and-sell’ environment to ‘uncover, discover’ environment, which is really about the art of taking people on a journey.

We’re part of that journey. We’re part of their understanding. So education is a very big and important part. You need to simplify it as much as possible.

We see that the process is actually moving from the old days, where it was about investment, to where it’s all about psychology. It’s going to be about the mindset of the customer and how they interact, where it be technology or face-to-face. In many instances, it’s going to be both for many clients.
Our journey is how we can move from the old world to the new world in a way which actually takes the client with us and educates them.

RM: As an industry, we’ve let customers down pretty badly over the last 10 to 15 years in the way we built portfolios. I think everybody would agree that risk profiling doesn’t work.

So our innovation is about building what we call ‘risk factor portfolios’. So actually building portfolios for clients where we manage the risk within the portfolios ourselves that are specific for them.

Because of the managed accounts we can get on Netwealth, we can actually build a portfolio and manage the risk within that portfolio so that the client gets exactly the outcome they’re looking for.

The second piece of innovation is this. In any scenario where I give advice and someone else pays for it, we’re going to be problem-wise. We’ll never been seen as genuine professionals when someone is paying us a commission. So we need to find a way to reinvent risk as we know it.

We’re going to strip all the stuff out of the products that we currently have, all the incentives, all of the kickbacks.

BN: One of the big things that I’m working on at the moment is around education. I’ve started seeing my job as to help people confidently balance their lifestyle and their money.

I think it’s impossible to get true confidence in your financial strategy without knowing enough to know that what you’re doing is the right thing for you.

As an adviser, I feel it’s my job to educate clients. The thing is though, what I’ve noticed is that you have the same conversation with clients all the time.
One thing that I’m working on is videos to explain different concepts. That then allows the one-on-one time you spend with clients to be on the absolute highest value.

MH: How do you get them to watch those videos?

BN: When I work with my clients, I’ve got a service agreement that I make them all sign before I agree to take them on as a client, and part of that agreement is that they accept that they have to commit to watching those videos. They know upfront that its part of it. I really think videos are a great way to leverage your time.

MH: Are you seeing changes in the way advisers are working with their clients? Do you they want to do it via Skype or just do an email exchange?

GE: The main clients want is choice. One week they may want to go one way, and one week they may want to go another way.

Technology allows you to do lots of things remotely. You can use things like Skype. But the real thing is choice and therefore advisers need to be up to date with what their clients are up to date with.

They’re using all sorts of different apps and technology to do things.

BN: I’d agree with that. You need to be able to work with, and often times it involves different media.

I think video conferencing technology is just getting better and better. I find that people still like that face-to-face contact but I think technology is making it easier and you’ve got to work in the way your clients want to be worked with.

MH: Is there a blockage in your business that you would us (platforms) or fintech to solve?

GE: The thing that concerns me about fintech is the commonality of words. There’s a difference between robo-advice and robo product flogging. We need to be very careful of what’s actually going on here. And I can see people taking their eyes off the main game and going out and chasing this great robo-advice star in the sky.

If you look around the world, most of the robo-advice is another way to sell a product. We think that people need to be very careful. Technology is costly and taking your eye off the ball is costly.

MH: Grahame has introduced robo-advice, which is certainly one of the topics here. Maybe continue along on that track.

BN: To comment on robo-advice, I think that people still want someone to work with. Everyone’s worked with clients who make their own decisions or make mistakes but if you’re a good adviser and something’s happening, you can explain things to them. Clients are still going to make bad decisions but they will probably make more bad decisions if they don’t have a real person. Use the robo, I think it’s a fantastic opportunity for advisers in the investment space.

RM: The most disappointing thing about technology from our perspective is that technology has not actually made advisers any more efficient today than they were 10 years ago.

When you look at the opportunity of robo-advice, which is really the automation of almost everything, I think the winners in this will be financial advice. I think the back offices will become more effective.

But if you had $50,000, would you (use robo)? Maybe. If you have $1 million, would you do it? I don’t think so. I don’t think it’s going to replace advice. I think what the computer misses is the one-on-one and people still need that.

Innovating beyond technology
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