In every field, customers often seek advice from experts. This process has historically been one that takes time as advisors need to collate data and analyse it before returning with some valuable advice. Technology has enabled this process to be shortened as advisors are given an extensive history of a client, bringing in data from bank accounts, pensions providers and other financial sources (following the client’s consent). From this, the advisor or wealth manager can see where the clients’ expenditure, pensions and investment portfolios might be improved to better perform for them.
Ross Laurie, co-founder of Visible Capital, is passionate about empowering consumers in their financial advice journey. He has worked in the technology and finance sector for over 20 years. His previous company built a number of onboarding interfaces for retirement planning. Now he and his co-founders Richard Braidwood and Christian Burgin are helping financial advice firms deliver better service to clients through data collation and enrichment.
The way consumers engage with their financial advice journey increasingly will be about the technology their advisers can use to help them better understand and manage their wealth.
This is why at Visible Capital, we are in what we see as a privileged position of delivering technology that while it is aimed at enabling financial advice firms, wealth managers and pensions providers to improve the efficiencies and cost-effectiveness of their businesses, its ultimate aim is to provide better outcomes for their clients, while simultaneously putting into the hands of the clients (the consumers) a tool they can use to their personal advantage.
To explain: The Visible Capital tool uses open banking technology to help automate the process used by financial advice/wealth management firms to onboard their customer, obtaining as comprehensive a picture as possible of the wealth the client has, where it is held and how they use their money day-to-day. With the client’s consent, the tool brings in data from bank accounts, pensions providers and other financial sources, to present a financial adviser or wealth manager with a real-time, highly accurate and detailed picture of the client’s wealth. From this, they can see where the clients’ expenditure, pensions and investment portfolios might be improved to better perform for them.
In a nutshell, it collates and enriches client financial data – the ‘gold dust’ of our era – which they can then use in their financial advice journey.
Talking to one element of that, client expenditure, I imagine we can all think of areas in our own lives where money spent could have been money better saved. If we hadn’t bought that latest piece of tech kit (which was nice to have but not necessary) and instead put the £3,000 into a pension and immediately received 20% or 40% uplift from tax relief, invested over the next 20-30 years, we are more than likely going to be better off long term.
For clients of financial advisers, having the ability to download their monthly/ quarterly/annual expenditure to see where their money is and what it’s making them, where their income comes from and how much of it they are spending, and where, can be both self-educational and significantly empowering.
For financial advice firms, it enables taking the client fact find from a traditional paper exercise to an immediate, data-rich digital download – the time and resource efficiencies and costs savings don’t need pointing out to anyone in the Fintech world – it also ticks the compliance boxes for regulatory requirements such as MiFID II.
More importantly, it gives the advisers immediate insights through real-time financial data into their clients’ wealth they have never had before, or if they did, took many hours to aggregate into meaningful data is why very few have taken this approach.
And yet, it has the ability to educate and empower the consumer, show the adviser where they can better serve their client by using data to support decision-making and reveal new opportunities for the firm to enhance products and services and bring in additional wealth to the business to be advised on/managed. Obvious wins all around.
The question is how willing are financial advice firms to adopt this kind of technology? A recent Financial Times article provided insight here when it said: “The speed of digital transformation in financial advice is accelerating … investing in technology is now a necessity not a luxury.” The latter half of that quote is where the promise lies. From our experience working with clients over the last 10 months or so, we have been consistently impressed with the speed at which financial advice firms are embracing new technology and with open arms.
We are finding that the majority of IT departments, CFOs, CEOs and marketing teams are all coming on board the digital revolution, working together to ensure their company has a back-end operation capable of driving transformative digital change.
There is another resource here too: data. This ‘gold dust’ can be turned into reports or visual dashboards that provide unprecedented access to up-to-the-minute information, which in turn provides solid foundations for identifying areas of product development, can help direct niche marketing and deliver crucial customer insights.
In addition, with more Advicetech in place, advisers are also finding that creating a friction-free customer experience is freeing up time for all important relationship-building conversations, an area that is likely to form a key part of what differentiates one firm from another in 2021 and beyond.