Fintech could be the answer to two of the biggest problems facing financial planners – doubt about future revenue and client engagement – a new whitepaper from the FPA states.
Contrary to the beliefs of many planners, most fintech complements traditional financial planning businesses, rather than competing with them, the research shows.
The study mapped the fintech in the advice industry and found that among the 369 fintech products in the market at the time the research was completed, 54 were a potential threat to planning firms.
Those threats are directly pitched to consumers and include Clover, Squirrel, InvestSMART, Spaceship and SuperAlbert. The paper found 13 replicated multiple steps in the financial planning process.
Ben Marshan, FPA head of policy, said the findings should allay the fears of its members about losing a share of their market to fintech.
“The message we get from planners around fintech is it’s confusing, overwhelming and there’s a little bit of a fear that fintechs are there to take their jobs,” he said. “We’re trying to encourage planners to find out how fintechs can help them by reducing their costs and engaging clients.”
The key ways fintech could help planners include assessing client finances, handling reviews, identifying goals, scoping advice, implementation, and Statement of Advice preparation.
The study also found that most fintech costs less than $200 a month for the licensed user, although the expense does vary.
The full whitepaper is available here.