Netwealth's Matt Heine with Paul Campbell from Xeppo

Over the past two decades technology has transformed the quality of financial advice enabling advisers to rapidly regroup and continue to operate from home during the Covid-19 crisis earlier this year, according to Netwealth joint-managing director Matt Hiene.

Speaking on the fourth Professional Planner Shape of Advice podcast series, Heine and Xeppo managing director Paul Campbell made the point that the ‘tech-stars’ advisers are proving to be much more profitable than the ‘tech-laggards’.

The duo agreed that the broader advice industry has seen a rise in the number of advice tech-stars with a real Silicon Valley mindset who are happy to try new things and experiment with tech. “They’ve got a really clear idea of what the problem is that they’re trying to solve,” Heine said.

But having the right tech-intentions doesn’t always translate to successful implementation, with some firms taking on bloated tech stacks that create inefficiencies and ultimately frustrate advisers.

“Often we see advisers adopting the newest, shiny tech; whether it’s a client portal, a monthly cashflow tool, whatever it might be, because they have a notion that it solves a problem for their client. But they haven’t actually asked their clients and they don’t really have a notion of how that then fits into their broader service offering or their tech stack,” he continued.

Too much tech can be a problem, Heine believes, with some firms limping along with up to 15 different software solutions that overlap, creating inefficiencies, cost blow-outs and a lack of integration common. “When you’ve got this sort of tech stack in an advice practice, advisers and their staff are actually pretty frustrated,” he says.

This poor experience has created some general reluctance around introducing new technology. “Some firms have been sold a lot of software with a lot of promises, and none of it has really been delivering for them, creating frustration. This has made tech adoption quite challenging,” Heine explains.

At the other end of the spectrum, some advisers are determined tech laggards who hold firm on the belief that a pen and paper is the way of the world. These advisers prove challenging to convert, he adds.

And while there’s room for both in the industry – for now, at least – the tech laggards will become obsolete in time. This is because the firms with the right technology built-in can achieve greater profitability, he says.

“You can really tell those businesses that put the client at the centre of everything they do and build their services and delivery around that. They’re able to manage more clients, they’ve got greater client satisfaction. By investing in tech, you can actually achieve the desired results that you want,” Heine says.

A new level of service

Clients are also increasingly accustomed to real-time, personalised service being dished up by the likes of Google, Facebook and Netflix, Heine adds. “That’s the level of service and experience they now expect from all their service providers.

Knowing where in the business to apply technology is part of the issue, Campbell says. “Advisers are looking at how they minimise repetitive processes and get connectivity between all their key systems and improve data insights.”

Ultimately, advisers are craving an integrated ecosystem where they can produce documentation, run a CRM and execute on their platform with as few keystrokes as possible, reducing inefficiencies and providing a richer experience and a transparent wealth picture to clients.

Tech can also be used to build client portals, which will in turn bolster client engagement. Or, tech can handle regulatory and compliance, reducing the cost of advice, which can cost up to $5,000 to produce, he adds.

“This area is becoming such a burden, and technology has to do a much better job in that space to help the adviser be more efficient and administer their obligations without killing them in terms of costs,” Campbell says.

Tech can also expose cross-sell opportunities by highlighting where documentation hasn’t been provided, ticking a lot of boxes for the licensee, the advice practice and the client, Heine adds.

And while there’s no quick fix for all, the pair have faith that the industry will resolve its tech issues before too long. After all, advisers have been facing a crisis in different forms for many years now. They’ve been dragged through regulatory changes, survived the GFC, and now the Covid-19 crisis has made them even more battle-ready. “Technology is just another battle they have to contend with,” Campbell says.

“Software will do its best to solve what is an art,” Campbell continues. “Advisers sometimes undersell or think about their role as being way too simple, when in fact what they’re doing is strategy and a little bit of fortune-telling.”

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