Or, in other words, the lack of integrated customer data that is holding back progress towards seamlessness and efficiency in the way our modern advice system operates.
In even more simplistic terms, getting a product or platform system to talk with an adviser’s technology stack at any stage of the customer advice journey (either product origination or ongoing maintenance stages) represents one of the biggest hurdles we collectively face.
Integration is not only a symbol of this challenge. It is the first vital front in a long campaign to bring the ecosystem of financial advice into a new era of digital empowerment.
This article opens the integration discussion to highlight the significant structural problem holding back the advancement of efficient quality advice in Australia and a battle for relevance faced by those whose product or administration platform service is challenged by the issue.
In big-picture terms, the Australian financial advice sector is at a crossroads. So-called digital advice is the hot ticket item for any public offer superannuation fund, and astute financial product providers seeking new ways to add value to a smaller pool of advice practitioners.
And, despite all the positive talk and goodwill promises of technological advancements, there remains a significant disconnect between product providers and their desired customer experience.
This gap is not minor; it is a significant problem that continues to be a deadweight to the entire industry’s potential. And as the industry turns toward a new era of digital disruption, the chasm between how advisers use products and how they are delivered and administered is becoming even more impossible to ignore.
So, despite the buzz around the transformative potential of system digitisation and user experience, providers are left neglected of direction on how to navigate. Let’s now explore why product manufacturers and platforms should start paying attention.
Simplicity and scalability
First, let’s agree on one thing: the disconnect between product providers and the adviser experience is undeniable. As a former financial adviser, I can attest to this myself. It is a problem that has been ignored for too long, resulting in frustration, inefficiency, and missed opportunities. Financial advisers are often forced to navigate systems designed without their input, leading to wasted time and resources. Product providers, weighed down either by bureaucracy or a lack of understanding, cannot deliver accessible solutions that truly address the adviser’s needs, resulting in a lack of real benefit for both parties.
At the heart of the issue is the volume of legacy systems and the lack of data standardisation between systems. Incumbent product institutions are grappling with several different siloed legacy systems that cannot communicate effectively, resulting in a very complex and slow-moving technology environment. This is not sustainable.
To combat this, institutions must prioritise investment into data infrastructure capabilities that complement their current technology environment and help them overcome the challenges they are facing. This includes enabling systems to communicate effectively with each other, both inside their organisation and outside with advisers’ technology stacks.
In doing so, providers lay the groundwork for a seamless advice process, leading to more efficiency, fewer errors, and subsequently, significant cost cuts. But the benefits don’t stop there. By addressing data infrastructure, providers allow themselves the opportunity for continued advancement and innovation. Collecting, managing, analysing, and leveraging data provides companies with deeper insights to inform decisions. We aren’t just talking about optimising data to its full potential; we’re talking about the ability to completely transform legacy systems into leading contemporary experiences that sharpen competitive edge.
In essence, it’s akin to building a house: you must get the foundations right. A house built on shaky ground is prone to collapse and unable to support further development. A lack of investment in data infrastructure to complement the legacy environment leaves businesses with an inability to scale, innovate or maximise the value of their data.
A prime example of this is the Originations solution, introduced late last year by Colonial First State in collaboration with Elemnta, which helped to significantly improve paper-based processes and enhance adviser experience. The solution effectively streamlines data management by allowing advisers to leverage their Xplan CRM data to pre-populate the data required to open new accounts.
However, digitisation benefits to the product provider go beyond cost and time efficiency. Integrated solutions can centralise systems, strengthening their role in the advice process. This centralisation enables a seamless experience for advisers, members, employers, and customers.
‘Digital-first’ differentiation
At the end of the day, it’s about being easier to do business with.
By listening to customer feedback and providing valuable experiences, providers can enhance their offerings.
In today’s industry landscape, ‘digital-first’ product strategies are becoming key for manufacturers to differentiate and compete in the market. Efficiencies and value-added digital capabilities, such as integration and process automation capabilities that deliver significant efficiency and simplification benefits, are increasingly central components for advisers when assessing platforms – a shift that marks a departure from the old reliance on commissions and kickbacks.
In short, time is the new currency for advisers given the admin burden of advice. By embracing digital integration and process automation, providers can make it easier for advisers and customers to access the services they need. This ease of doing business is not just a nicety; it is a critical component of success in the modern marketplace.
Furthermore, the incorporation of value-added features, such as ‘whole of wealth reporting’, into platforms can offer an even greater value proposition, particularly for superannuation and investment platforms.
By providing a platform that meets the actual needs of the adviser, including comprehensive insights into clients’ entire wealth portfolios, manufacturers can go from bottlenecking the advice journey to enabling it.
Any product that makes life easier while providing additional value is poised to win the support of time-short advisers. The stakes at play? Nothing short of relevancy – whether or not the provider can continue to play its part in a competitive landscape.
The product provider plays a critical role in the advice ecosystem, but not until providers look outside their backyards will they have a chance to keep pace with the industry.
The days of outdated, disconnected systems are over. To address inefficiencies, providers must listen to advisors and adapt accordingly.
By embracing digital integration, they can enhance efficiency, relevance, and customer experience.
The golden prize lies in embracing change, listening to customers, and providing value-driven experiences. The time has come to cut the bureaucratic red tape and prioritise the needs of advisors and customers alike.
The future of the Australian financial advice industry is digital, integrated, and customer-centric. It’s time for providers to embrace it.
Shaun Green is chief executive of Elemnta.
How’s Macquarie Wraps digitisation going ? Gggrrrrrrrrrrrr 🙁
To quote Mr Green:-
“Financial advisers are often forced to navigate systems designed without their input, leading to wasted time and resources. Product providers, weighed down either by bureaucracy or a lack of understanding, cannot deliver accessible solutions that truly address the adviser’s needs, resulting in a lack of real benefit for both parties.”
Mr Green is of course referring to investment products.
But let me tell you the same problem exists over with the life insurers, only 10 times worse. Arrogance abounds! Consultation with practicing advisers or even better the back office workers who use the systems should be a fundamental. That’s followed by recognition that you have to spend money to update systems.
But of course shareholder value gets in the way of that aim, and the attached CEO bonuses could be under threat. And then there’s the ego issue when a larger insurer purchasers another insurer and the ego gets to work attempting to transfer the records from the old system into their in-house system. Right now three large insurers are attempting to move to transfer data from the former systems to their systems and the result is not very pleasant nor efficient for ADVISERS.
Do Apra care?