BT’s annual study tour this year took advisers to the United Kingdom.
The five-day trip included meetings with advisers, investors and industry bodies. This short article is part of a series of key lessons learnt from the trip.
All firms in the UK study tour talked about the use of technology. While most agree technology is beneficial within firms, its aptitude for some client segments is greater than others.
There is also a sense that technology, and particularly robo-advice, hasn’t had the impact expected.
All agreed the industry still has a way to go before fully utilising technology.
At St. James’s Place (SJP), the group uses SS&C Bluedoor as its platform, which allows it to have a single client record and attach products to individual clients. It recently introduced a Salesforce client relationship management (CRM) tool.
The Salesforce CRM is ‘powerful’ with the introduction of the ‘consumer duty’ rule in the UK. SJP is able to adapt Salesforce to access client information and understand how SJP’s partner firms service clients.
SJP also introduced an ‘advice assistant’ using artificial intelligence. The advice assistant takes into consideration all the information on Salesforce, pulls together an automatic advice recommendation, and sends it to a SJP partner. The partner firm approves it, and then the advice assistant prints off all required documentation.
While it only works on certain products thus far, it is a significant shift forward from robo-advice, SJP says.
Disruptors and tech solutions
Hambro Perks has spent time studying the role of technology in wealth management. The most obvious opportunity is greater efficiency. Client onboarding can be done almost seamlessly using technology.
Regulators have kept up with the pace of change, and when iPhone introduced face verification, onboarding changed completely in the UK, the company says.
The flip side is that technology allows the growth of digital first advisers – companies that begin with new technology, and then build their adviser businesses on top.
While disruptors haven’t been as revolutionary as feared five years ago, there are some very capable technology advisers in the market.
HP says the relatively slow adoption rate of technology in the financial advice industry isn’t a bad thing, because it gives people time to adjust.
Technology-based solutions are emerging in the mass affluent category, including people who traditionally couldn’t afford an adviser but want some kind of support.
They are also being used in the high net wealth and ultra-high net wealth categories, where people want greater control over their finances and demand greater transparency. But that sector also demands a human adviser.
Robo advice in the UK, according to HP, is not being adopted in the high, and ultra-high, net worth sectors of the market, though it is being adopted in the middle and upper-middle class of clients, and by younger investors.
The advice from HP: For firms introducing new technology particularly for onboarding, ensure the client experience is ‘beautiful’. People want ease of use, and that’s something older legacy systems don’t always provide.
Particularly among younger clients, phone calls aren’t always necessary or wanted and they expect to be technology enabled.