A slogan in search of a purpose
In an increasingly difficult environment, it’s entirely reasonable for advisers and licensees advice to seek solutions for declining margins and increasing professional obligations.
For those businesses that are barely keeping their heads above water, it’s only natural that they cling to any proposed solution; but for every useful application bobbing atop the waves, there’s a water-logged application likely to drag you under.
The challenge posed to experts at the FPA National Congress was how to Identify and implement the right technological solutions for advisers.
In a panel dominated by industry thought-leaders, our Managing Director, Sean Graham, provided a critical and sometimes contrarian view of the advice-tech solution. As part of a provocative and entertaining panel session, he articulated how regtech, like openafsl, tries to solve these practical issues and free licensees and advisers from the burden of compliance. In his view, this is the real opportunity that technology provides to advisers.
The lure and limits of technology
To summarise, Sean argued that in an environment of declining margins and increasing obligations, advice-tech, as a concept, is largely focused on efficiency and technical compliance.
These are important, but they’re not ‘advice’ problems per se nor are should they be the guiding principles for advice professionals. In his view, advice-tech dangerously misrepresents its value because it’s predominantly focused on solving pricing, process and positioning problems.
We tend to agree. ‘Advice-tech’ is an inchoate mix of multiple solutions that generate a range of implications and consequences far broader than the problem statement they aspire to solve. Worse still, it’s a solution generally sold as a panacea with no downside. Few, if any advice-tech solutions address the substance of the sacred trust – the substantive relationship of reliance and dependance – and fewer even acknowledge the qualitative, subjective and human character of advice.
Instead, advice-tech unhelpfully includes, and is comprised of, any technological solution or application that could conceivably be used by an adviser.
Purpose and definition
Consistent with the FPA’s industry discussion of advice and technology, we agree that more specificity is required. In our view, if it is to be a useful categorisation, the label of ‘advice-tech’ should be limited to technology designed to solve one of the seven key advice challenges.
In our view, advice-tech has to:
- Improve the quality of advice
- improve the production of advice documents
- Improve the quality of advice documents
- Improve the client experience
- Improve the efficiency of the advice business
- Improve the profitability of the advice business
- Ensure the sustainability of the advice business.
“Reg-tech solutions, like OpenAFSL, are designed to address at least four of these requirements and evolve to match, if not anticipate, changing regulatory requirements. This is why, for example, our Advice Assurance already incorporates and assesses compliance with the FASEA Code and facilitates separate granular reporting on Code compliance.
Solutions
The sad and certain reality for advisers, and one repeated by many of the panelists, is that not a single piece of technology provides the answer for these critical challenges.
Instead, advisers and Licensees need to think in terms of ecosystems of complementary and integrated applications.
The optimistic observations made by the advisers on the panel is that efficient, effective and bespoke advice-tech solutions can be built without a significant investment of time and resources. Lateral thinking, complementary development and the innovative application of existing technology provides even the smallest practice with more development capability than they appreciate. By utilising options like Xeppo, Formstack and Umlaut, advisers can build eco-systems that solve their actual problems (rather than being sold a product that creates more problems).
It’s not easy to do but we’ve seen our own clients develop their own solutions to challenges of quality, efficiency and sustainability.
It might not be for you but don’t dismiss the opportunity the right technology provides to you and your business.
