4 ways technology makes financial advice more profitable
The view that financial planners are slow to adapt to technological change is quickly becoming outdated.
Increasingly, financial planners see technology as an essential component of the advice process. Far from being a threat, technology is helping financial planners to work more efficiently and, in many cases, grow their business’ revenue.
From researching products to risk profiling, technology can streamline business processes, reduce administrative tasks, and ensure regulatory compliance.
Thanks to coronavirus, the benefits of technology are being realised by even the most traditional financial advisers. As an article in The Financial Times points out, video calls have removed the need to travel to client meetings, thereby enabling advisers to speak to clients more regularly and save valuable time.
Here are four ways technology makes financial advice more profitable.
1. Technology lowers costs
Technology can dramatically reduce the cost of providing financial advice – from the client onboarding stage right up to drawing up a financial plan and offering an ongoing service.
According to NextWealth, it costs an average of £1,500 to onboard a client, however, some financial advice firms are already innovating in this area. Sanlam, for example, has launched an ‘on demand’ service for prospective clients, with free 45-minute same-day consultations advertised via Facebook.
By lowering costs, technology helps financial planners extend their services to people who might otherwise be excluded from professional advice.
For example, as a recent article in FTAdviser explains, technology enables advisers to ensure clients are offered the most appropriate advice model to meet their particular circumstances.
“Not only does this approach enable access to a broader client pool, market segments and new revenue streams through digital, real-time low-cost access to advice, but by maximising the use of technology it can also enable advisers to deliver services in a different way,” says Steve Andrews at Focus Solutions.
2. Smaller clients can be serviced economically
Technology enables financial planners to offer advice to all of their clients, even their smaller, legacy clients. Historically, looking after the needs of smaller clients has been uneconomical, but so-called ‘hybrid advice’ models are changing this.
A survey by Octopus Investments found 76% of advisers said a hybrid financial advice model will be the future, while 81% thought the next generation of financial advisers will have to incorporate aspects of robo-advice into their offering.
“This sentiment reflects advisers’ increasing awareness that robo-advice could become the way some people initially get financial advice, presenting an opportunity for advisers to show the benefits of advice and expand their client base in time,” the report says.
AdviceBridge’s retirement planning app is an example of the type of technology that can help financial planners bridge the advice gap. The intuitive, personalised app can open up advice opportunities and help financial planners increase their profitability.
3. Technology can showcase the value of financial advice
Technology can help to showcase the benefits of financial planning to people who might not ordinarily speak to a financial planner.
For example, a financial planner who looks after a group scheme could offer an automated retirement advice service to employees. This could show employees what they need to consider when planning for retirement and let them check whether their goals are on track.
By demonstrating the value of financial advice, technology can help financial planners build a pipeline of future clients.
4. Financial planning becomes more efficient
Incorporating technology can make financial planning more efficient. Software removes a lot of the administrative burden of providing advice, enabling financial planners to focus on serving more clients.
In Octopus Investments’ survey, almost half (44%) of financial advisers said they expect technology to help them free up time to better service clients. Some of the areas in which technology saves time include onboarding clients, investment analysis, producing illustrations, automated cashflow planning, interacting with clients via the web, and producing financial plans.
Technology really comes into its own when extending financial planning to smaller clients. By offering an automated, streamlined service, financial planners can provide a highly efficient and profitable service to legacy clients.
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AdviceBridge’s retirement planning app makes financial planning more accessible, affordable and profitable.
To find out how AdviceBridge can help you grow your business, please get in touch. Email firstname.lastname@example.org or call us on 020 3925 3850. You can also visit our website at www.advicebridge.com to book a quick demo with our friendly team.