Financial planning businesses contemplating how to integrate a robo-advice or robo-investment offering into an advice proposition, need first to have a very clear strategy for how they want to deliver advice – and who they want to deliver it to.
“The most successful advice businesses in future will have multiple channels, to engage with clients face-to-face, by phone and by technology solutions,” says Rod Bristow (pictured), managing director and chief executive officer of Infocus Wealth Management.
Earlier this month Infocus launched the cutely named earnie.com.au, the result of more than 18 months of strategic planning, working with client focus groups and technology deployment.
Bristow says the development of the online service came only after the company had defined a clear multi-channel advice delivery strategy, and would not work as effectively, or indeed at all, if it were a simple bolt-on to existing advice.
Bristow says earnie.com.au integrates with Infocus’s bespoke customer relationship management (CRM) system, and it also links into robust technology solutions provided by third parties, principally Morningstar, Praemium and Dunn & Bradstreet.
But critically, earnie.com.au provides its users with access to human advisers at any step along the way. Bristow says it is clear from the experiences of robo-advice businesses overseas that “pure robos that don’t have any advice linkages … are really struggling to be successful”.
“That’s a challenging business model,” he says.
Bristow says Infocus currently has 10 salaried advisers who will support the online service, answering and interacting with users of earnie.com.au as needed. That number will grow over time.
“We have a national network of advisers who have an opportunity to participate in earnie as well,” he says.
Use it or lose it
He says an online service gives advisers an opportunity to engage with more clients, and for advisers to protect their businesses.
“The thing about advice relationships is when we talk about it internally, it’s ‘use it or lose it’,” Bristow says.
“If you do not have an active engagement plan with your clients, your clients are at risk [of leaving].”
While there are potentially clear benefits for Infocus’s existing advice network, Bristow says earnie.com.au is fundamentally “all about consumers, and how consumers want to engage with advice”.
“If we as an industry do not respond to consumer needs, then consumers will pass us by,” he says.
Bristow says the launch of the online advice service was part of a broader answer to the question of how Infocus could “deliver quality advice to Australians from all walks of life”.
“The strategic starting point was how we could achieve that, when only one in five Australians is seeking advice at the moment,” he says.
Lacking the brand awareness of larger financial services groups means Infocus will need to work smartly to ensure its target market – chiefly approximately six million Millennials, born between the early 1980s and late 1990s – knows about it. He says the firm will use both above-the-line and below-the-line approaches.
“Millennials rely on each other for feedback,” he says. “They are digital natives.”
Online advice will need to stand up to regulatory scrutiny at least as well as traditional advice, Bristow says, echoing comments recently by the chief executive officer of the Financial Planning Association (FPA), Dante De Gori, that regulation of all personal advice should be consistent, irrespective of how it is ultimately delivered.
Satisfy requirements online
“One thing I was cognisant of from a strategic perspective when we were thinking about what earnie could become, was you just need to look at regulatory trends in the traditional advice space to know what is going to happen to regulatory trends in the [robo] space,” Bristow says. And this view helped Infocus decide that it would build its own solution rather than look to buy something off the shelf or white-label someone else’s.
In effect, Infocus has built the chassis – which includes its CRM system – and then integrated Morningstar’s investment calculation engine, Praemium’s implementation platform and Dunn & Bradstreet’s identity verification process, to make the service seamless. A user of the service can, for example, satisfy Anti Money Laundering (AML) requirements by completing the 100-point check completely online.
