As an IFA in the digital age, technology is likely to be the subject of daily conversations among your team.
While building an efficient technology stack is essential, losing the human touch could mean your clients feel undervalued or, at worst, ignored. They pay for your expertise – so keeping the personal side of your practice at the forefront of what you do is essential.
Nevertheless, without technological advancement, your firm could fall behind the times and be less appealing to clients.
So, you might be wondering: “how do I use technology and harness its potential without alienating my clients?”
To help answer this question, here are three reasons to embrace technology as a financial planner in today’s advice space.
1. Technology can help you assess risk more accurately
Findings from the 2022 NextWealth Adviser Tech Stack Report, published by Money Marketing, reveal that an increasing number of advisers had stalled the process of adopting new technology for their business.
Perhaps unsurprisingly, one of the top reasons cited for this delay was “the risk of something going wrong”.
While there is always some risk involved in using technology, it’s important to consider how technology could also help to reduce risk in two key ways: the avoidance of human error, and the rapid processing of information.
For instance, investment tech, including analytical software and model portfolios, could be your number one ally in reassuring concerned clients. This software can:
- Conduct accurate, efficient risk mapping for individual client portfolios
- Project a client’s future financial situation after taking on an almost unlimited amount of information about their circumstances
- Factor in external elements that could affect investment performance, such as inflation
- Produce easy-to-read reports that can be shared with clients during annual reviews.
So, while it’s essential to look at cybersecurity and data protection whenever you add a new feature to your tech stack, technology can be an invaluable aid to risk management.
Plus, the results produced by analytical and model portfolio software may hit home more powerfully for clients. They may make increasingly data-led decisions, and begin to remove their emotions from the equation.
Ultimately, providing clients with readable data that you can explain with visual aids may improve their peace of mind, reduce financial stress, and instil further trust in their long-term financial plan.
2. Embracing technology can help to free up your schedule
Putting together a tech stack that meets your firm’s needs can help you improve efficiency and accuracy in the following areas:
- Paraplanning
- Due diligence
- Risk mapping
- Marketing
- Scheduling
- Compliance
- Financial education for colleagues and clients.
One apt example of how tech can improve efficiency and free up valuable time is that of Letters of Authority (LoAs).
According to a report from lang cat, financial planners report that LoAs can take “months to complete”, throwing off the otherwise efficient processes they’ve worked hard to refine.
Fortunately, by using tech to speed up communication, along with setting efficient expectations within your team, you could find that even the most arduous of processes can be streamlined by embracing technology as an IFA.
Of course, creating a bespoke tech stack that works for your firm is driven by one key goal: client outcomes.
With software taking much of the administrative weight off your shoulders, your schedule can revolve around reviewing client data, constructing bespoke plans to help them thrive, and meeting with them to put these plans in place.
This is exactly how technology can humanise, not dehumanise, your firm: your tech will work hard in the background while you, the face of the operation, can be more present in those all-important client relationships.
3. Technology can help you meet the new Consumer Duty regulations
Consumer Duty is one of the most commonly discussed developments the financial services profession has seen in recent years.
As an IFA, your firm will be expected to rise to these regulations, which state that:
- Firms must provide customers with products and services that can meet their financial needs and objectives
- IFAs must communicate with clients in an accessible manner, so that they fully understand the financial commitments they are making, and the risks involved
- Customers should be offered support and guidance when they need it.
Most IFAs are broadly meeting these criteria already – independent, understandable, client-focused advice lies at the heart of what you do. But if you have any doubts in your mind about meeting these expectations 100% of the time, as your firm will be expected to, technology can help.
For instance, being available for virtual meetings could free up more hours in your working day, enabling you to fit more client conversations into your weekly, monthly, and annual schedule.
And, as you read earlier, investment technology, including cashflow modelling, model portfolios, and analytical software can produce key performance data in bitesize chunks. Clients can download these, print them, or store them however they like – helping them to remain up to date on their financial situation as the years go by.
These are just two of countless examples of how your firm could tap into powerful tech resources and more easily meet the new Consumer Duty regulations.
Get in touch to become part of a network that embraces evolution
If you wish to improve your technology stack, learn more about the fintech available to your practice, or discuss any other matter affecting your firm, we can help.
Our award-winning network helps advisers keep pace with our ever-changing profession. We can help you explore fintech options that meet your firm’s needs, so you can grow your business in line with clients’ evolving needs and expectations.
To get started, email hello@corbelpartners.co.uk or call 01925 637891.
Please note
This blog is for general information only and does not constitute advice.
The Financial Conduct Authority do not regulate cashflow planning.
