National advice gap will be filled by financial advice firms daring to go digital

Written on
byNicola Wee

The industry has long been aware of the advice gap.  A recent report revealed just 9% of British adults have a financial adviser which means there are 11 million adults with pensions and investment products but no expert guidance.  However, the effects of lockdown have meant “…customer appetite and acceptance of video calls has increased and now 63% of advised clients say that they would be happy to engage with their adviser this way,” according to Holly Mackay, MD for Boring Money.

 

With the government relaxing lockdown restrictions and UK business set to open on the 4th of July, advice firms that have adopted or are accelerating their digital client service initiatives will be in the best position to dominate that gap for 11 million advisor-less adults across the nation. 

 

As we enter into the worst global economic recession since the Second World War, large swathes of the population – now more than ever – will need professional financial advisers to help them make sound decisions about their future.  And this doesn’t just apply to the privileged few, but across all socio-economic demographics.  The only way advice firms can achieve this extended reach effectively is to digitise their service.  

 

Daring to go digital

Many financial advice companies had either started or were building their digital transformation programmes well before COVID-19.  Regardless of where you are along your digital journey, market and social conditions now demand contactless interaction.  Whether it’s keeping your advisers or clients safe by minimising face-to-face interaction or reducing the cost of travel, a simple way of extending your reach and serving clients without compromising on quality is video conferencing (VC).  VC can also give your advisers access to advanced tools, underpinned by AI technology, that not only help advisers achieve to reach but can cut some serious cost and time to serve too.

 

As advice firms begin to assess their future operating model, it is becoming clear a hybrid solution built around client needs is the only way forward. By wrapping artificial intelligence (AI) around the client journey, advisers can:  

 

Achieve greater reach.  The right VC solution gives advisers a way to connect with clients well beyond that of their immediate locality.  It means every adviser is a national adviser. However, with more clients comes greater work burden.  As the majority of the advice gap has an asset base that requires only a ‘light-touch’, how can digitisation that enables access to this broader client base also help advisers to serve it more efficiently?  By wrapping AI around the client journey, advisers can drive significant productivity gains whilst benefiting client transparency, awareness and outcomes.

 

Decrease cost to serve.  Digital automation means advisers can reduce time with clients without compromising on the quality of care.  Low-value admin such as data extraction and meeting outputs can be automated, with the focus of the adviser being purely on the client. Essentially, digital automation gives you the ability to take 100 clients and turn them into 200 using the same amount of time and effort yet offering a better client experience.

 

Attract the next generation of wealth.  Advisers offering a digital-first, AI-enriched approach, will be ahead of the game when it comes to capturing the next generation of wealth.  Younger demographics are tech-savvy, time-poor and don’t see digital service as a ‘nice to have’, they just expect it.  As the spending power begins to shift more towards the Millennials cohort, advice firms will need to differentiate themselves with their digital service if they’re to succeed at winning over this incoming generation of client.

 

The irony is companies that don’t act now, risk being automated out of the game by more forward-thinking, AI-enabled businesses that understand the ‘new normal’ has completely changed the advice landscape for the long-term.

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