Advice and technology trends – Money Management


Wealth management and advice are predominantly analytical spheres, and the business case for investing in new technology is often related to achieving efficiencies and reducing costs. During COVID-19, we have been reminded that emotions run deep in our left-brain dominant industry.

Care and connection were what clients sought from advisers when markets plunged and panic spread during the early days of COVID-19. A platform provider, as the medium between the two, was in a unique position to enable advisers to connect with their clients, and keep the advice relationship effective – which in turn helped to calm clients’ nerves, and give them peace of mind during an uncertain time.

Platform technology that facilitates digital consent, easy to access online reporting and notifications, and other digital functionality helped to bridge the gap caused by social distancing and remote working. 

Related News:

As with any intangible value, care and connection are difficult to measure. The fact that there was minimal flight to cash on BT Panorama – where nearly all investors are advised – especially in the first few rocky months of the pandemic, is potentially indicative of how successfully those intangible values were delivered.

Similarly, the value of anecdotal evidence is not quantifiable, yet a compelling narrative leaves a lasting impression. Last year we heard from advisers about how they brought clients along on the tech journey, especially older clients who were new to using mobile apps to manage their finances and video conferencing. This shared experience became another powerful demonstration of the value of advice.

It’s easy to underestimate the significance of emotion in investing. For some, it may seem surprising that robo-advice has not taken off as predicted (even in the US, where it is three times as popular as here in Australia, take-up has been relatively slow). COVID-19 has made apparent why investors prefer to get their advice from fellow human beings.

Advisers’ ability to handle emotions and provide reassurance will always set them apart. While there is a role for automation in processes that are behind the scenes within an advice practice, and for robo-advice to evolve into a more hybrid solution, most investors still seem to prefer the human touch.

As life returns to normal, many advice practices are taking the learnings from COVID-19 and continuing to take great leaps forward in their digital transformation journey.

For advisers, there is now even greater emphasis on making the client interface intuitive and elegant. To provide a seamless online experience for clients, it’s imperative to connect systems such as the adviser’s client portal, the investment platform, digital ID processes, the adviser’s client relationship management system (CRM), and ancillary services such as document storage and news feeds. 

With the likes of Apple and Netflix setting the standard, consumers expect technology to enable immediate delivery of information and execution of instructions – and for advice clients, that means a pension payment amendment, a cash transaction or a tranche of money being invested should be done swiftly, and preferably via a mobile app.

A constant challenge is how to contextualise data so that clients can interpret it in a meaningful way, and easily drill down into areas of special interest. A case in point is the growing volume of information on sustainable investing, where investment options are often classed within and across interchangeable categories, sometimes rendering the classification meaningless and investors lost in the environmental, social and governance (ESG) jargon. Platforms can assist with clearing up the confusion by organising this information in a user-friendly way.

Shaking up your world view and perceiving value in a right-brain dominant way is a necessary exercise when it comes to designing tech that’s primarily used by clients. 
The left-brain view of tech may be more familiar for many in our industry – tech improves efficiency, facilitates transactions and reduces costs.

The difference between the two perspectives is illustrated in the use of selfies. A US-based company can calculate an estimate for life insurance based on a selfie. The primary purpose of the technology is engagement. Other companies have designed tech to allow the use of selfies for digital identification. Pictures can tell a thousand words, evoke emotions and appeal to our vanity. Because pictures or short videos can capture so much detail – moreover, biometric data that is unique to each person – when it comes to verifying identification, they can also save money and time.

Later this year, as part of the myGovID system, the Australian Tax Office (ATO) expects to be able to use selfies, along with documents, for electronic identity verification. The private sector is moving in the same direction.

For the wealth management and advice industry, a universal pain point that technology can assist with is the cost of compliance. In Australia, regtech is making compliance and risk management processes, such as advice file reviews and audits, more efficient. 

We look to the largest regtech market in the world, the UK, for innovations which may be applicable to our market. Social distancing measures have seen an increasing number of UK firms use virtual Know Your Customer (KYC) checks. Along with digital verification and other remote customer onboarding approaches processes, according to the Financial Conduct Authority, progress in this area can result in improved financial inclusion and access to financial services.

Platforms are continually evolving to support advisers with their quest to reduce these administrative tasks and more, with processes that can adapt to different advice practices’ own processes, keeping in mind that everyone’s digital transformation journey is different.

Furthermore, wealth managers are using technology to provide support to advisers and clients 24/7, with tools such as chat bots which use artificial intelligence to learn from previous questions and continually refine a knowledge bank. 

I’ve used the left vs right brain dominant language of pop psychology to discuss technology trends but in reality, the two are not mutually exclusive. To illustrate, when designing a tool to improve efficiency such as an AI-enabled chat bot, the client experience remains the priority; furthermore, we talk about giving our chat bot a personality that reflects brand values authentically.

It’s an exciting time to be running a platform. While the COVID-19 cloud is still hovering, it has a silver lining. The pandemic has accelerated the digital transformation in the wealth and advice industry. Investors’ behaviours during market volatility have served to remind us of the intangible value of what we do, the ability of tech to connect advisers with clients and give them peace of mind. The sense of purpose we have gained from this experience motivates us to continue to innovate in a meaningful, empathetic way. 

Meanwhile, the economy has come through better than we may have predicted a year ago, and with Australians’ increased interest in how their super is invested, along with medium to long-term impacts such as the great wealth transfer between generations, new opportunities are emerging.  

Kathy Vincent is managing director, platforms, investments and operations at BT.