Technology needs to deliver Adviser Experiences not just features
By Shannon Bernasconi, Managing Director, WealthO2
Post Royal Commission, margin pressures on advisers - whether through increased compliance,
licensee costs, or the removal of past commission-based revenue - are here to stay.
There are many articles and opinion pieces that highlight how technology can bring about efficiency
and scale and improve the adviser’s client experience. Every year wraps and platforms are rated
based on whether they offer certain features or not, with the race for new functions between the
incumbents now a well-trodden path. Yet with all these features in the market, there is still a gap in
the move to efficiencies and solutions in the adviser practice.
For true efficiency advisers need to look beyond past practices. They should no longer be buying
products and services for their features, they should seek experiences, for their clients and their staff
that are delivered via services.
Take for example the implementation of asset recommendations. A feature would be the ability to
generate the Record of Advice (ROA). An experience would be the ability to generate many ROAs in
bulk, authorise their release to the clients for electronic sign off, and knowledge that only upon their
authorisation, which is stored for compliance, are the recommendations executed to market
(without any adviser effort to do so).
This is one of many examples in the Advice value chain that through an experience-based solution,
can significantly reduce both administration burden and costs, and reduce the implementation
timeframes, reducing risk in stressed market conditions as well as ensuring compliance and audit.
In a past world of higher margins and less regulation and compliance, using one system for one
feature and another for the next step in the process, with human capital to connect the dots, would
have been an accepted status quo. Times have now changed and margin pressures are real.
There are two channels available to the adviser practice to help improve those margins, namely
increasing the efficiency of the practice, which can also enable growth; and margin recovery from
the product providers by moving to naked pricing and lower cost solutions to deliver the advice.
It is in the selection by advisers of partner solutions, who deliver an end to end experience for the
adviser and their staff, that the efficiency gains can be realised. Importantly the chosen solution also
needs to integrate both data as well as desired experience outcomes with other solutions in the
value chain. Take for example a financial planning firm that also offers accounting services. The
solution that the planner chooses should not detract from the accountant’s solution and end clients’
experience. For example, if the planner uses a managed account solution and that solution does not
cater for minimum trade parcel, then the accounting service has increased workload and complexity
in accounting for additional small parcels of trades.
Hence in choosing the right partner solutions, the adviser has the right to expect an end to end
experience, not just a set of features. And it is on this measure that the industry needs to change its
approach in partner selection.