The next generation of financial advice is digital

Whether it’s education, business strategy, advice specialisation or technology investment, the decisions made right now will determine the future and success of your practice.

Adapting to a new industry landscape can be challenging, but it can also create unprecedented opportunity for advisers who adapt their business models to fit rapidly changing sociocultural, demographic, regulatory and technology expectations.

When it comes to new technologies, empowered customers are setting the agenda for technology investment as financial advice practitioners strive to adapt to these ever-changing demands.

Clients of all ages increasingly value digital access to financial planning tools for education, information, and provision of advice.

Digital tools also offer advisers new and efficient ways to deliver the comprehensive and accessible digital advice their clients seek. While face-to-face communication remains essential, software that lets clients safely self-manage and review their investment portfolio is highly attractive, especially for younger generations. These tools provide increased transparency and engagement with clients, supporting face-to-face interactions and ensuring a positive and valuable financial advice journey.

Today’s consumer is accustomed to using digital tools for information and a degree of self-management; providing services through digital channels can not only increase client’s access and trust in financial advice services but also the likelihood they’ll reach out to an adviser for personalised guidance.

Currently the Australian industry is divided between advisers targeting clients that prefer personalised advice and robo-advisers. Digital advice enables advisers to appeal to both types of clients by adopting a hybrid model, also known as “omnichannel advice” that incorporates a mix of personal service with digital advice.

In the American market hybrid advice has become the predominant delivery model over the last few years. Although Australia has been slower to adopt this, some of the leading superannuation funds have created a true omnichannel advice experience. Through this they provide clients with a cost-effective digital service for self-management of simple needs, with seamless data integration through to the traditional financial planning team where more complex requirements warrant a personal engagement.

Our expectation is that this will become the new norm, with small and large wealth management players taking advantage of digital tools to provide an omnichannel advice delivery model.

For clients, digital advice tools, when done well create a more accessible and affordable way to receive financial advice. This ultimately leads to an improvement in their financial wellness.

Digital advice tools also generate internal benefits for your financial advice practice. For instance, digital tools create operational efficiency and enable automation of back-office processes. As a result, advisers can scale up their practices to take on more clients without compromising on service.

Adopting digital solutions will also position your practice as a forward-thinker to attract new clients at a faster rate than your peers, and can improve your client experience and communications, thus increasing retention rates.

Importantly, digital tools help you show the value of ongoing advice services and can help your practice navigate the current complex regulatory environment by measuring and anticipating risk.

As we start not only a new year but a new decade, what better time to think about futureproofing your financial advice practice and adopting next-generation wealth management and advice solutions.

Catalina Lopez, business development manager, Midwinter