The Insignia Financial-owned licensee Shadforth Financial Group has embarked on an overhaul of its advice tech stack the firm’s chief executive Terry Dillon believes will “revolutionise” its business and underpin a doubling in size.
Speaking at the Professional Planner Licensee Summit, Dillon said that with around 100 advisers and more than 250 staff, the business is seeking to dramatically improve productivity and enhance adviser efficiency.
Dillon said the licensee was working to a three-year timetable for implementation, and it was exploiting what he described as its “superpower” – which it possesses by virtue of its advisers being employed – to get all of its advisers to agree to work on a common tech stack.
“We’re in the first year of a…strategic plan to double the size of Shadforth,” he said.
“If we don’t change our current technology stack we will hit a ceiling and we won’t be able to continue to grow at the rate that I know [Insignia financial CEO] Scott [Hartley] wants us to.”
Dillon said most of the work will be undertaken in the next two years with the pay-off expected to begin in year three. He said Shadforth had a substantial budget to work with but “in some ways, we are behind many of the smaller, more nimble players in the industry”.
“But we are being very deliberate about it,” he said.
“We’ve had a team for the last 12 months sitting in the business, with their advisers, following the work, sitting in meetings with clients, sitting with CSOs [client service officers]…looking at the pain points in the business, and then working with our technology team to say, if we’re going to add technology to this, how do you actually solve the problems, and not just technology over poor processes?”
Dillon said that while the need for the tech overhaul was pressing, it would not be rushed.
“We’ve got to sequence it properly. We’ve got to get funding along the way from Scott and we’ve got to make sure we’re showing return on investment,” he said.
“But my own view is, for a business like ours, where our great superpower is getting 100 great advisers to agree on the best way forward, the con would be it takes us too long to get going, but if you do it deliberately we think we can really revolutionize our business, and it can make a massive difference for us.”
The summit heard that an integrated and efficient tech stack is a foundation for growth of any business, be it licensee or advice practice.
While Shadforth aims to have all its advisers using the same technology, Centrepoint Alliance (CPAL) group executive of technology solutions Tanya Seale said the business was taking a different approach by creating what could be described as a technology Approved Product List. Centrepoint had identified and vetted some 35 technology vendors that its advisers may pick and choose from.
She said the licensee had configured the tech products to fit with the licensee’s processes and templates, so advisers really could plug-and-play with what they choose. The list was split into two tiers: CPAL-approved, and security-approved.
“The CPAL-approved are probably the ones that we’ve done more research on and worked more closely with, and we think are probably best in class in terms of what they do,” Seale said.
“But at the same time, we do not want to stop advisers who couldn’t live without another particular software and were able to use that. We’re looking at, obviously, integration, how it integrates with our core CRMs [customer relationship managers] – do we have direct integration to reduce that data entry; in terms of how does it fit, is there already something available that does it space; and price, as well.”
Of the 35 approved technologies on the CPAL list four are AI. Three of those started out as simple transcription services but have evolved now to “dabbling in producing records of advice”.
“We haven’t allowed use of AI-generated records of advice yet, because there’s not enough consistency, and you need to give the AI so much data…so you actually don’t get that efficiency,” Seale said.
“The transcription service was an easy one, because there’s limited data, [it’s] very easy to train the AI to get a result that’s generally of a pretty good level. But in the other areas, not so much. So, where we’re starting to play around more is using AI in conjunction with RPA – robotic process automation.”
BT chief executive Matt Rady said that while specific technologies deployed inside businesses are clearly critical to efficiency and productivity, it’s just as important that staff are trained to be technologists, and capable of adapting and employing new technologies as they emerge and are taken up.
“I was having a conversation with [big four consulting firm] PwC, and they were talking about their consulting business, for example, on AI, and their view now is, you know what? You don’t need us to come in and build some fancy thing for you; we’ll come in and train your staff, because that’s where the technology is going to be,” Rady said.
“When we’re talking about small business or medium sized business or big business, training your staff to become technologists is where the evolution of this is going.
“[You] just need to put some parameters around it and bring that capability into the organisation. The key message there is get staff and educate them…on the way AI is working and evolving. They’re already using it. Adopt it.”
Rady said advice practices and licensees could also learn from large corporates on how they assess improvements inside the organisation.
“You’ve got to know what are your starting points,” he said.
“[You’ve] got to know exactly what you’re trying to achieve. Is it about efficiency, or is it about client experience? If it’s about client experience, you have to know and measure what client experience is today so you can actually see where it’s successful. So start with a baseline.”
