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I have seen the future, and it’s digital

This is the third article in my series on the recent Financial Services Technology Survey. Today, I discuss the findings on how clients reacted to the prospect of virtual financial advice from a global perspective and the benefits (and value) to advisors and their clients.

Fig. 1 – Client response to client engagement technologies

This result should come as no surprise as it is backed up by international trends from even before the pandemic.  A McKinsey report titled The virtual financial advisor from as far back as 2015 estimated that some 42 million households would prefer to receive virtual advice.  Its probably safe to say that this number has quadrupled over the past year which confirms our findings that close to 90% of clients were and are happy to engage with their advisor remotely.

For the financial services industry the writing has been on the wall for a while.  Whereas advice firms and FSPs that made the change or were in the process of developing virtual business were in the minority pre-Covid, any organisation, large or small, and irrespective of service and sector should now have a digital customer engagement strategy in place.  Clients are no longer intimidated by technology and virtual business offers a viable safe alternative to the days of an advisor and client meeting either at an office or home.  With the plethora of browser-based tools and platforms linked to digital meeting rooms, sessions can be in-person, but they are online.

The Covid pandemic limit will neither control nor curtail this shift. If customers are happy to receive remote advice with the added benefits of meeting time flexibility and no location constraints under current conditions, it will prove difficult to overcome these expectations and behaviours in the future. The age of remote advice is very much upon us.

What does this mean for the industry and advisors?  There are a number of very worthwhile  benefits:

Hybrid advice model – the ability to cater for specific customer demands allows the advisor to offer a flexible approach when engaging.  A client might prefer a physical in-person meeting at the start of the advice relationship followed by online meetings.  Alternatively, s/he might be quite content to engage digitally from the beginning.  Flexibility in response to client requirements is key and will become more of a differentiator as the market evolves.

Decreased costs – the physical meeting overhead becomes a thing of the past when engaging digitally.  There are direct savings of both time and money in the form of reduced travel, office space, physical meeting, printing paraphernalia… the list is ongoing.

Business efficiencies – it’s all online. Paper and printing are reduced, recordings replace the typed records of advice, document workflows replace the need for an ink completed form and administration and compliance can be managed from multiple locations. Value is found not only in cost savings alone.

Simple digital fulfilment – the online advice process is much more simplified with current solutions offering integrated advice process management. Whether it’s basic KYC via facial technologies or the ability to sign documents in a meeting room or remotely engage with a client anywhere in the world, digital options are readily available.

Quality assurance – key individuals can exercise their oversight of the advice process via meeting recordings and CRM client dashboards.  Opportunities for upskilling and sales support can be identified and implemented thus ensuring an enhanced and replicable customer experience.

Increased book – studies from mature markets have shown that ‘virtual’ advisors are able to increase their book size by up to 50%.  It’s a real incentive….

The past year has been about survival.  That mode is now behind us.  It’s critical that we consider our technology options and strategies to prosper in this new, but in certain ways very similar, world.  There are still clients and they deserve the best financial advice available no matter what the engagement medium.

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