The average 40-something financial adviser recognises that technology has the power to transform their advice and business processes, but they have difficulty understanding how to leverage technology to increase efficiency and productivity.

But adopting technology doesn’t have to be daunting or complicated. The advent of cloud-computing and “software as a service” (SaaS), which allows consumers to easily and relatively cheaply license software on a subscription basis (think Xero, Salesforce and even Mailchimp), has removed traditional barriers to adopting sophisticated technology.

There are three key ways technology can help advisers drive growth and efficiency.

  1. Effective client engagement and marketing
  2. Increased practice efficiency and productivity
  3. New product development.

Effective client engagement and marketing

Mobile technology is changing the way businesses connect with their customers, yet financial advisers largely connect with their clients the same way: face-to-face or on the phone.

There are programs which would allow advisers to set up alerts and send automated messages as an alternative way to remind clients when it’s time to book a quarterly review, update their will, lodge a tax return, top up their superannuation fund or simply tell them about a new product or service.

Automated messaging also allows advisers to send advice documents like records of advice (RoAs) and performance reports efficiently and to a large number of clients within a short timeframe.

There are many free videoconferencing services available to advisers and their clients that need no integration, or very little set-up at all, to get started. Used well, these services provide an easy yet professional method for effective client engagement.

Another way advisers can communicate with their clients is through Webinars, which allow communication with a number of clients at the same time without an adviser even having to leave the office.

The combination of older clients becoming less mobile and younger people seeking advice is likely to see more advice practices use videoconferencing technology as a way to reach, educate and communicate with their clients.

Increased practice efficiency and productivity

It’s never been quicker or easier for investors and advisers to execute investment ideas and implement changes across a broad number of portfolios.

Straight-through processing and data sharing removes the need for advisers to manually collect and re-enter client information, leading to enormous efficiency gains.

A common way to lift efficiency is to integrate technology solutions to create a streamlined system. An example of this is the integration of Moneysoft with financial planning software, Xplan, which allows advisers to collect and feed basic information on a client’s financial position and cashflow into Xplan’s front-end platform.

Also if an adviser wanted to make changes to a model portfolio, they historically needed to manually issue every affected client with an RoA and gain written approval. However, they now have the ability to electronically alert clients about a proposed change and give them the ability to tick a box and instantly approve it. That change can then be automatically implemented across the portfolio.

These are examples of how technology is making advice processes more scalable and efficient while reducing the amount of paperwork required and reducing the amount of repetitious, manual work required.

Furthermore, advisers can electronically record, store and retrieve client information, including audio and video files of meetings and conversations.

New product and service development

The flow-on effect of a more engaged client base and greater automation and efficiency is that advisers can spend more time developing new solutions to meet their clients’ evolving needs.

In the last few years, there has been a renewed focus around savings, budgeting and cash-flow management services, owing largely to demand from younger clients and the availability of cloud-based technology that automatically gathers client account balance and transaction data from a wide range of sources to provide advisers with a complete picture of a client’s total financial position as well as their financial behaviour.

Historically, product development was lengthy and expensive but with cloud and SaaS technology, businesses can speed up the process by testing rudimentary ideas; tracking the take-up of new offerings; electronically surveying consumers to learn about their experience; and quickly accelerating popular ideas or ditching them completely.

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Take a lead from telcos

The financial services industry could take its lead from telecommunications, which is constantly trialling different mobile, data and service plans, to see which service package has the most traction in the market. Services are constantly tested and unpopular ones are commonly demoted within months of being launched, with little disruption to clients and minimum commercial impact to the business.

Telecommunications providers rely on technology to deliver their own services, but a large and increasing part of the use of technology across the last few years has been focused on improving the customer experience.

When it comes to adopting technology, the financial advice industry may not be at the cutting edge but it isn’t as far behind as many might think. Technology doesn’t have to be complicated. In fact, it can provide huge upside for very little effort. It’s not as hard as many might perceive.

With technology, advisers can make big or small changes to how they do business with minimal disruption and cost, but the potential to reach new advice audiences, better serve existing clients and ultimately boost efficiency and productivity is huge.

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