Five ways technology is changing the future of financial advice (for the better)


Technology is changing the way financial advisers work, with software and apps increasingly central to what advisers do.

It’s also changing what clients expect from their advisers — and potentially enabling advisers to offer new kinds of services.

Here’s five ways technology is already reshaping the business, and how it’s going to change in the near future.

‘Hybrid’ advice could unlock millions more customers

The rise of automated financial advice could unlock a potentially huge pool of new customers, according to a 2017 Deloitte report on the UK financial advice market.

Deloitte predicts that while many customers will move to automated financial advice, there will also be many customers who prefer a ‘hybrid’ service (ie using software and speaking to an adviser).

Deloitte predicts that with 18 million UK adults with savings of more than £5,000, up to 40% would be willing to pay for automated/hybrid advice — potentially meaning seven million new customers.

Deloitte said, ‘For more complex decisions, customers will still want to speak with an adviser in addition to using a website — the so-called hybrid model — to ensure they have made good choices.’

Technology can help broaden a firm’s offering

Integration of data and the use of innovative software will enable financial advisers to automate previously time-consuming processes. Freeing up adviser time for them to focus on their face-to-face offering, using good technology to supplement, rather than replace, flesh-and-blood advice, will allow advisers to offer more services.

Steve Andrews, Head of Managed Solutions, Focus Group, says, “New technology has the ability to provide essential savings and investment services to many more people, in an informative, engaging and more affordable way. Traditional advisory firms can embed these technologies into their propositions, enhancing their existing services and to open up services to a wider customer base.”

He continues, “How consumers access and purchase goods and services have significantly changed, so firms who embrace new enhanced services with the consumer at the centre will gain a competitive advantage. New digital technologies will also drive increased efficiencies across functions in the back office, administration, compliance, monitoring and reporting.”

Transparency will unlock new kinds of financial services

New legislation such as Open Banking, forcing banks to make data available to customers, could mean advisory firms and providers are able to offer new services.

Steve Andrews, Head of Managed Services, at Focus Solutions, says, ‘Data sharing is going to be an essential factor in the digital transformation of the industry. That ability to analyse real-time data can both support the traditional advice process — by significantly reducing administration time — while new developments in Artificial Intelligence (AI) can be implemented to support digital services.”

Technology will help to build trust with clients

Advisory firms who can provide very transparent, 24/7 services, like access to client portals that can provide real-time valuations, essential communications and information, will increase their customers’ awareness and understanding of their financial position. Tools that will ultimately increase their client’s engagement and trust.

A Deloitte report on trends in wealth management suggests that customers increasingly ‘want to stay in control of their financial lives and understand the advice they receive.’

Software tools will increasingly allow customers to be part of the big decisions in their financial lives.

‘Detailed planning enriches the advice process and client relationship,’ Andrews, explains.

Artificial intelligence will engage a new generation of customers

Artificial intelligence has the ability to engage millennial consumers, in fact all potential consumers. The modern consumer is increasingly used to purchasing goods and services in this way, for example hailing an Uber or buying from Amazon. The expectation will be no different when buying professional services.

New technology platforms and applications will make financial advice more engaging and informative to meet the changing needs from the modern consumer.

Gartner predicts that by the end of 2020, 20% of people in developed countries will use AI in their everyday tasks.