Technology: The new frontier

30 March 2020

Kevin Liao

Kevin Liao is CEO of YTML.

The quality and range of specialist technology solutions available now to planners, is allowing the implementation and integration of new technology to be done more seamlessly, limiting potential disruption to a business and its bottom line.

In the new world order for financial planning, demonstrating value to clients is critical, the burden of proof is heavy, so who’s got time to innovate? The trouble is it’s not enough to just prioritise innovation – it’s about knowing how to innovate.

The profession is going through seismic change and it would be almost impossible to emerge on the other side of this transformation without technology playing a central role.

Just as you can’t expect a different result by doing the same thing, the need to do something different is even more urgent under the stern eyes of the regulator.

This has forced many groups to look beyond the main ‘one-stop-shop’ providers and consider specialist tech providers to augment and strengthen their technology position.

But with limited time and budget, where do you start?

Advice technology trends

Advice technology has evolved more quickly in recent years in response to so many industry challenges.

Let’s face it, the financial planners of the past weren’t as demanding of their technology providers and tended to put up with what they had been using for many years. When it came to advice technology, the most sought after capabilities were likely to be a suitable CRM, a modelling tool, SOA generation and portfolio management. Those who already have this set up can congratulate themselves on being among the early adopters.

When ‘best interest’ came along, the demand on technology to deliver greater efficiency and more automated compliance grew significantly. Operating scale became the war cry, and meaningful client engagement the driver for change.

The volume of these demands since the Royal Commission saw the advent of what is now known as Regtechs (or Regulatory Technology) and a wave of newer, more specialised technologies flooding the market, each solving a key gap for planners.

But while these Regtech products and specialised technologies offer planners more choice, the lack of meaningful integration across these choices can create inefficiencies. So, to prevent going back to square one, there has been a welcome wave of renewed collaboration and integration between tech providers, creating a new frontier for advice practices of the future.

Does this come at a high price?

Surprisingly, stepping into this new frontier doesn’t cost as much as you’d expect, and is easier to implement than you’d think.

Being on the forefront doesn’t have to mean drastic changes or saying farewell to your entire financial planning software inventory. Often, it’s about picking one critical component of your advice process and focusing change within that area.

Take the client data gathering process as an example.

Industry research indicates that one in two planners believe client acquisition is a burdensome task that is getting in the way of growing their business. A lot of this burden comes down to the time involved in gathering information about the client and those initial meetings to determine goals, objectives and the scope of advice. Solving this problem would therefore directly impact on the ability to scale up their business.

A potentially quick and cost-effective solution could be to implement the use of an engaging online fact-find tool that encourages the client to provide more accurate information upfront, or using a personal finance application to capture up-to-date financial information and track client spending patterns, leading to better advice.

There are now a number of solutions available that will allow you to connect your data across different software applications, thereby creating a more cohesive ecosystem. Ensuring any application or tool you choose can pass data to your main financial planning software will mean that implementing this change does not detract from overall efficiency, while adding tremendous value to your business.

In order to increase client acquisition, deliver quality advice and remain compliant, planners need to look beyond the usual suspects and source other tools that specifically target these problems.

Leading edge client engagement tools, SOA document generation tools and client presentation software are just some of the solutions available.

Furthermore, many of these specialist tech solutions, with the ability to connect into your existing system, often come at costs as low as $50 to $100 a month.

Practical tips

Here are some practical tips to help you with your choice of technology.

When assessing tech providers:

  • Talk to peers and other planners on their experience with technology and what works well for them.
  • Attend conferences and events to be exposed to new ideas.
  • Read industry news, articles and research reports.
  • Professional associations often provide in-depth research into solutions across the industry.

How to get support and advice on taking the next steps:

  • Have a frank and open discussion with your dealer group, as it’s important to be aware of their boundaries when it comes to technology solutions.
  • Clearly articulate your current tech environment and critical gaps.
  • Ask providers how they can address those gaps.
  • Understand the initial and ongoing costs and potential return on investment in taking up any software solutions.
  • Understand what the implementation looks like, from both a timeframe and change management perspective.
  • One thing we know for sure is that more changes are coming, and you will want to remain agile to adapt to these. With the vast variety of quality specialist tech solutions now available, adopting new technology can be done step-by-step, limiting disruption to your business and your bottom line.

Kevin Liao is CEO of YTML.