Advisers who attended the 2014 AFA National Conference could be forgiven for thinking – where does my future lie?

‘Robo-Advice’ was vigorously debated with some predicting the demise of face-to-face financial advice over the next 10-20 years. Is this a reality? The simple answer is – nobody really knows.

What we do know is we need to be aware of the changing environment – not just in technology but in consumer preferences – in the way they want to deal with financial advice. Not current clients but future consumers. We need to adapt.

We also know that any disruptive play in a market brings with it multiple opportunities to re-invent yourself or your business.

It’s our belief that there will always be a need to have a face-to-face financial advice offering – it just may happen later in the advice cycle than it does now.

As a Licensee, we need to develop the tools and services for advisers to participate in the new world and let them choose which ones suit their particular business model. There’s a lot of work ahead of us but we need start now.

In the meantime, advisers need to ensure they have a viable Client Value Proposition (CVP) which clients are comfortable with and willing to pay for, that they have adopted best-practice processes and technology to reduce costs and inefficiencies and most importantly that they have engaged clients that will help them grow their business through referrals.

Advisers will need to do determine which part or parts of the advice cycle they want to participate in, what they want to offer at each stage and how they will be remunerated.

CVP’s developed now need to consider:

• consumers changing behaviours which have become – give me what I want, when I want it, how I want it;

• their take-up of online and desire to do parts of the traditional value chain themselves ( eg research, transacting);

• advancements in artificial intelligence and augmented reality which are shaping consumer’s user experiences in other areas ( eg Siri, virtual assistants deployed by websites, Google glasses); and

• the internet which means consumers are always connected and often unknowingly leaving data footprints which can be used to better tailor services and response rates.

Our group’s extensive research into this area identified that our industry is way behind in thought leadership and practical change. We plan to take a multi stage approach – knowledge audit; practice support and tool sharing.

To assist our advisers around ‘best-practice’ we are about to embark on an internal Benchmarking project where will be able to identify where each practice sits against each peer in a number of different areas including CVP, profitability, use of technology and workflows/processes.

This will be linked to our Knowledge Audit Library where advisers not only have access to what their peers are doing but enables them to share their ideas in an on-line forum.

‘Knowledge audit’ excites us because many of our practices have developed solutions and tools that others are replicating. Why double spend when sharing can be achieved? Monies saved can be directed to future developments. While we’re doing this within our group, we would love others to join our crusade and welcome discussions with other Licensees – small or large.

There will be significant changes to the advice industry over the next few years but we believe we will be ready for the challenges ahead.

Giulio Russo is general manager of Madison Financial Group
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