The future of financial advice

TECH AND TOUCH: CLIENTS, ADVISORS WIN

Investment planning must be multi-dimensional, incorporating financial advisors and technology.

There’s much talk around investing digitally right now. Supporters suggest investors cut out their brokers/financial advisors and invest through digital platforms. They argue that while an advisor might give your investments an edge in growth, their fees tend to negate the value they add.

But the value financial advisors add isn’t only about choosing a winning portfolio of shares or unit trusts. It’s about looking at every aspect of your financial services requirements and working out what’s best for you.

A financial advisor will see the big picture, considering all the personal variables in your specific set of circumstances and advise you accordingly. So, instead of asking: “Should I take my investments into the digital space and cut out my advisor?”, ask: “Should I request higher levels of technological interaction from my advisor to support the services he offers?”.

Technological innovation

Imagine if, when you needed to check your bank balance, you had to send an e-mail to your banker, wait a day, then receive an e-mail with the information requested.

This is a level of service we’d never accept from banks. We can check a balance, make a transfer or pay a beneficiary any time, anywhere.

The technology that has worked so well for banking is now available to other types of financial services. Yet, we continue to be stuck in financial advisor – and call centre relationships – during office hours.

Although there hasn’t yet been much uptake of this kind of technology, financial advisors have access to online platforms that show their clients how their investments are performing. But these tools can do so much more.

It’s possible to use technology to create a dashboard that shows investments, retirement planning, the state of insurance cover and even whether or not there’s an up-to-date will. These dashboards can take into account an individual’s whole financial picture, from multiple providers.

But they don’t take away from the value of a financial advisor who knows the investor.

A financial advisor will still be the best person to suggest revisiting life, dread disease and disability cover every few years, to ensure it’s in keeping with what the insured person earns.

Or perhaps upping various types of cover after a child’s birth. Or recommending changes to retirement and investment structures in line with changing legislation.

The tech-and-touch model

Since both financial advisors and technology have an important role to play in supporting individuals in making the right financial decisions, and in the convenience of access to information, I recommend a “touch-and-tech” engagement model.

This way a client has a relationship with a financial advisor who understands them, their family, and their needs, and the advisor has a technological platform that allows the client to see the bigger picture of their financial, investment, insurance and estate-planning situation.

The platform can offer recommendations if there are areas lacking and can even facilitate changes if the client is confident enough to make them themselves.

Eugene Maree is director of Wealthport.