This article was produced in partnership with Netwealth
The professionalisation of financial advice has been a long and at times often painful journey but practitioners and firms are starting to reap the rewards of technology-enabled client experience and practice efficiency, says Netwealth CEO Matt Heine.
In an exclusive interview with Professional Planner ahead of his keynote address to the Netwealth Accelerate Summit on Thursday – an invite-only advice innovation conference in Melbourne attended by more than 500 advisers – Heine said a technology-enabled growth and client engagement mindset had finally taken centre-stage.
“As an industry, there is definitely a greater focus on innovation than there was even two, three or four years ago,” Heine says. “And the reason why I think that’s occurred really aligns itself to the industry shifting to a profession with greater corporatisation.”
Heine says the growing scale being achieved by many advice firms – especially emerging national brands he describes as “super-firms” – has enabled sufficient support structures and allowed them to allocate their budget, time and resources to the things he says are increasingly understood as high priority: innovation, technology, client experience, efficiency and margin.
“All of those things have conflated to actually provide the environment where, finally, advisers are not only being forced but have capacity to innovate because business and fee models have changed,” he said.
“I have often seen that ‘innovation stems from adversity’. The industry has been forced to change, and I think, whilst it’s been often painful, one of the benefits is the profession is far more corporatised, with resources to focus.
“The focus now is on business model innovation, technology and the client, not regulation and industry issues.”
Coupling efficiency and engagement
While Heine has detected a shift in sentiment in the profession, and heightened focus on innovation and business growth after the regulatory debates of the past decades, he says the financial services industry broadly still lags other sectors on digital user experience and engagement.
He offered client portals as an example of a development seen as “one of the next big waves of innovation” in advice but already well-established in other industries. “But advice firms are now waking up to that,” he adds.
“Where you can actually couple great client experience which also drives efficiency, it’s a win for the practice and a win for the client. Those solutions are now becoming more available, and Netwealth is investing heavily in this area.”
These win-win scenarios take on additional importance when harnessed to meet the national social challenge of unmet advice needs. Citing NMG Consulting data, Heine echoes the concerns of many industry leaders that, by 2050, there may be as few as 10,000 active advisers to meet the “complex advice needs” of 7.2 million Australians.
That phrase, he says, will only take on more meaning as firms meet the challenge of expanding their client bases across the more traditional segments of high-net-worth, mass affluent and emerging affluent.
“These people have complex advice needs regardless of which segment they’re in,” he says. “Just because you’re a younger emerging affluent doesn’t mean you can’t be a very profitable client for an adviser, because you’re going to have mortgage and superannuation needs, potentially tax and structuring needs all the way through to the other end.”
Getting ‘data ready’
Assisting advisers to create the capacity in their businesses to serve more of these clients with unmet advice needs is a major strategic focus for Netwealth, Heine says as part of his keynote at Netwealth’s Accelerate Summit on Thursday.
He indicated that Netwealth has isolated four priorities for its own product innovation to aid that process: client digital experience; efficiency and automation; better investment solutions (including access to elusive private markets); and data and insights.
The latter focus was part of the reason Netwealth announced earlier this month it would acquire 100 per cent of Xeppo, a data management and analytics platform that helps professional services firms including wealth management, accounting and mortgage firms connect their existing enterprise systems to remove duplication and improve business intelligence.
Heine told the Summit that the acquisition aligns with Netwealth’s goal of “having data at the heart of everything we do”, while also preparing the company and its customers for an “AI-driven future”.
He is hoping delegates to the Accelerate Summit will be more willing to try new things that might open up capacity in their business and help them help more Australians with their complex or unmet advice needs.
“We’d love advisers to walk away inspired and open to trying and experimenting with new ways of doing things, being open to new technologies and business models and open to engaging with new partners.”
