If you have been an adviser for many years, you could feel as if you’ve watched the world change before your eyes.
Few things make us feel nostalgic more than music, and this year, Radiohead’s game-changing OK Computer album turns 26. Released in the dawn of the internet age, this album spoke to the nature of changing technology before any of us really knew how powerful it could be.
From the invention of social media to extraordinary medical advances and progressions in artificial intelligence (AI), technology has surely shaped the lives of every single person in the UK since the turn of the century.
As an adviser, understanding the role of tech in your own practice is invaluable. Knowing how technology can serve both your firm and your clients, while understanding its potential drawbacks and dangers, is essential to success in today’s world.
So, here are five ways technology has transformed financial services in the past 25 years, and why it should matter to your firm.
1. The rise of online tools has transformed the way clients handle their money
If asked to name the ways your clients’ interactions with their wealth have been transformed by technology, you’d probably be writing that list for a while.
Even down to its most basic level, personal finance has been almost entirely digitised. The Bank of England (BoE) reports that, as of July 2022, only 1 in 5 people say they regularly use cash. While this figure is higher than it was during the pandemic, 80% of people still prefer to use cards and bank transfers.
Beyond everyday personal finance, there is the question of clients handling their wealth on a big scale.
Your clients may now be able to access all aspects of their finances, including pensions, investments, protection documents, payslips, mortgage information, and many more, without even leaving the house.
So, with clients having increased control over the minutiae of their finances, you could find regular check-ins useful. Ensuring clients are researching their decisions first, rather than letting spontaneity get the better of them, could help clients stay on track to meet their goals.
2. Many clients now find their financial adviser online
Crucially, the digital age has also shifted the way clients seek financial advice.
Your firm might have undergone a digital transformation throughout the past two decades, focusing more time and money on implementing or improving the following criteria:
- Website marketing and design
- Creating an accessible online client journey
- Cultivating a social media presence
- Sending regular digital communications, such as email newsletters
- Gaining positive Google reviews.
If you are not yet fully engaged with these factors, the importance of implementing them cannot be understated. Even if you prefer to do things “the old-fashioned way”, without a digital presence, clients simply may not be aware you exist.
3. Cashflow modelling has helped move the industry towards goals-based planning
One of the tectonic technological shifts experienced in financial services since the dawn of the Internet is the development of cashflow modelling software.
Pioneered by one of the UK’s most influential financial planners, Paul Etheridge, who sadly passed away in January 2023, lifelong cashflow modelling software has been one of the key catalysts in shifting financial planning away from investment returns and towards client-focused goals.
Within your own firm, you could rely heavily on the use of cashflow modelling software, both in your relationships with your clients and to gain peace of mind in your practice.
While cashflow modelling is no crystal ball, and its data should not be taken as gospel, it can revolutionise your client’s experience of taking advice. With clients’ dreams placed at the centre of the conversation, it is no wonder Professional Adviser reports that as of 2020, 90% of advisers said they used cashflow modelling. What’s more, the report reveals the results of a 2021 survey which showed 88% of advisers said the software engaged clients with the financial planning process.
4. Social media and investment apps have both empowered and endangered individuals
Of course, the changes brought by the digital age have not all been entirely positive.
With seemingly endless information at our fingertips at all times, there is also a stream of misinformation that, in the hands of optimistic clients, could lead to costly decisions.
Both social media and the presence of day trading apps have ushered in a cohort of investment “experts” who “help” individuals, many of who may be otherwise unadvised, put their money into the stock market.
While investment accessibility has been improved by the Internet, if your clients engage with online trading, the value of your influence as an adviser cannot be understated.
Indeed, in 2021, the Financial Conduct Authority (FCA) launched an £11 million campaign targeting new investors – largely younger individuals who may not otherwise seek professional advice – who were at risk of making uninformed choices.
FCA data suggests 58% of under-40s who had invested in “high risk” products, such as cryptocurrency and forex, said “hype on social media and in the news lies behind their investment decisions”.
What’s more, in October 2022, the City of London Police warned that £890 million was lost to investment fraud in the 2021/22 tax year, up a startling 49.5% from the previous year. The report states “criminals are now using social media to target people with fake investment opportunities”, yet insists the “cold-calling tactics have not gone away” either.
As an adviser, being aware of the dangers the digital age has brought to investors – particularly to younger clients – cannot be understated. Working with clients to ensure they trust your judgement, and to inform them of potential scams that could be devastating to their wealth, is vital.
5. Hybrid client relationships have allowed greater room for accessibility
On a more positive note, the online era we find ourselves in, coupled with the Covid-19 pandemic, has pushed our industry into an age of hybrid working.
Running a financial planning business entirely from home was tough for many firms, but the ability to meet with clients on Zoom could be game-changing, particularly for vulnerable clients.
Indeed, this hybrid model can benefit clients who:
- Have accessibility needs that mean it’s more comfortable to meet online
- Live abroad all or some of the time
- Need to fit meetings around their busy schedules
- Wish to use the services of a firm outside of their local area.
Not only can a hybrid working model benefit clients, but it could provide countless opportunities for your firm, too.
You may be able to:
- Fit more client meetings into the same working day
- Work to a more flexible schedule that fits the needs of your family
- Attend and run webinars and other online conferences with ease
- Access a network of advisers who can boost your confidence and knowledge
- Take training courses online to further your qualifications.
Here at Corbel Partners, we can help your firm succeed in the age of fintech
If you have been in the business since the release of Radiohead’s OK Computer – or perhaps even before – you might have found the rapid digitisation of financial services overwhelming.
Here at Corbel Partners, we understand the importance of having an incredible digital platform behind you. From safeguarding to time management to accessible software (and everything in-between), we can help your firm excel in the modern world.
Our network of independent advisers benefits from:
- Multiple training opportunities each year
- Paraplanning and administration support
- Due diligence support
- Access to state-of-the-art software, including Morningstar, Twenty7Tec Mortgage Sourcing, Assureweb, SolutionBuilder, and MandateiO.
In fact, our own experience can speak for itself. We have recently made a significant investment into building a bespoke client onboarding platform that will improve our client journey and make the process entirely digital.
So, no matter what support you need when digitising your financial advice firm, we can lend a hand.
Get in touch
This blog is for general information only and does not constitute advice.