Turo blog

The changing face of post-pandemic financial advice - Professional Adviser article.

October 26, 2021

First of a two-part series that first appeared in Professional Adviser on 25th October 2021.

Financial advice firms that have adopted a more digital service delivery during the pandemic are capturing new clients and will be better set up to satisfy future intergenerational advice demand, writes Simon Binney.

The fundamental shift in the use of online services during the pandemic has been well documented. It has affected the behaviour and consumption of consumers and industries alike.

It has helped to open the eyes of many financial advice firms to new ways of working and it has accelerated the trend towards digital servicing of clients (existing and new), which was already growing within the industry. Digital offers both advice firms and clients more convenience, increased personalisation and better control.

There is no going back from this. In fact, I'd argue it is a trend that is about to grow exponentially.

The pandemic also has made consumers more aware of the need for financial planning. Wealth advisers have reported new business as "higher or much higher" because of the crisis - with some reporting growth of more than 30%. This has caused fulfilment issues for many firms, especially those with systems that don't talk to one another and largely rely on manual processes.

What financial advice firms of all sizes need to do now is ensure they prosper by making the most of digital, integration and self-service technology.

Adapting to a digital approach

A digital approach helps to transform the advice process from its current reactive state to a more proactive stance. Digital adoption in financial advice allows clients to benefit from an enhanced level of client service, kept smooth, consistent and compliant, while advisers can focus on the core area of their business activity.

For example, just consider what you could do if fact-finding wasn't so time-consuming. Wealth Wizards' client data reveals that 95% of clients who have been sent fact-finding elements digitally to pre-complete, prior to a planned meeting, do so in time. This saves between 30-45 minutes of adviser facing time, which is better spent focused on understanding client objectives.

That's a higher completion level than you'd expect when going through the same process with a human. Furthermore, because it is a process that new clients can complete in their own time, prior to the meeting with the adviser, it is a better client experience too.

Technology stands to transform the dynamic between adviser and the client, without taking away anything from the relationship and trust. Now, when a new client comes to interact with the adviser for their first meeting, they can get straight to the subject matter at hand - improving a client's financial position. And that's what modern-day consumers expect in other aspects of their lives.

Further benefits

But the benefits of a digital approach for advisers go beyond that.

For a growing and significant number of wealth management firms autonomous finance is business-critical, as well as being essential for client retention. Integrating automation tools into the advice process allows advisers to focus more on their core activities. Also, they can bring down client acquisition costs, enabling them to reach new audiences. Automation tools that are compliant can provide robust advice on a host of topics such as consolidation of assets, retirement planning, portfolio rebalancing, automated savings, and so on.

When you weigh up the advantages of hybrid advice technology, the client is the one benefitting the most. Advisers are using tech to do most of the ‘heavy lifting', meaning more time can be spent with the client. Automation speeds up the advice process delivering a high standard of consistently compliant recommendations most suited to a client's stated objectives.

Hybrid advice and intergenerational planning

One of the growing issues for financial advice firms is how to attract the clients of the future.

A hybrid advice offering, utilising digitally enabled technology - automated and digital processes - and contact with an adviser, the human touch, only when needed, can ensure existing and future clients can interact with an advice firm in the way that best suits their needs at the different stages. In addition, it can make the financial advice firm more efficient, cost-effective, and so more profitable.

UK consumers now want more choice, in terms of the assistance they can receive from their financial advice provider - basic help, guidance or full advice - and how they receive it. Firms that offer a range of ways for clients to interact with them will open up their services to this new wave of investors and savers.

For example, someone who wants to use their ISA allowance, and/or wants help with regularly investing into an investment portfolio, or is looking for pension guidance, may not want, need, or be prepared pay to see an adviser. The hybrid advice model enables this type of wealth accumulating client to be taken through the advice process outside of contact with an adviser, using techniques such as chatbots to help with explanations and guide them in the right direction, following an advice firm's investment or pensions policy.

This self-serve guidance is affordable to the client and can be operated with very little input from the advice firm, making it a profitable addition to a full-advice service. It also brings wealth accumulating clients into the business.

For those clients who need more help, hybrid, digitally-led advice can use similar techniques to help clients through the fact find and onboarding process, as mentioned, and provide two-way communication with an adviser when needed.

Having this kind of multi-channel approach is about delivering the right interaction whether through technology or a human adviser. If a customer wants to interact digitally in the evening or see an adviser face-to-face during the day, there are different channels available through their financial advice firm.

And no matter how the client interacts with the advice firm there is a consistent and compliant approach, aligned to the firm's advice policy, with integrated technology to ensure that no data is lost in the system and has to be re-entered.

Tough choices

The pandemic has without doubt put the financial advice sector onto a new trajectory. And adapting to the ‘new normal' will require some tough choices. At the heart of these changes is a desire to serve more clients and create consistently better client outcomes. To achieve this requires a constant focus on the customer, to create experiences that cater to their changing needs, and allow them to engage in meaningful ways in an ‘always-on' digital economy.

What is clearer than ever before, is the effect of the rapidly emerging connected economy, and the essential supportive role hybrid advice stands to play in the financial advice market.

If you'd like more information on digital and hybrid advice please email simon.binney@wealthwizards.com

This article was originally published in Professional Adviser on 25th October 2021 https://www.professionaladviser.com/opinion/4039068/simon-binney-changing-post-pandemic-financial-advice

Written by
Simon Binney

Simon is Business Development Director at Wealth Wizards, with over 20 years' experience driving the development of automated financial advice.

Find out more about Turo and how it can automate key parts of the advice process for your clients and advisers.

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