Over the years we’ve seen the financial advisory industry transformed through technology. Yet despite the fears that financial advice from humans will be replaced by tech, the role of the financial adviser continues to thrive. Here are five trends that help explain how, and why.
To survive in any type of business, one must continue to adapt and evolve, and that has certainly been true for the financial adviser. For example, back in the 1970s and 1980s, the role was essentially little more than that of a stockbroker. When stock brokering became automated, advisers moved on to working with other financial products for their clients, until online brokerage platforms enabled customers to make investments for themselves. Financial advisers began to specialise in other areas such as asset allocation. As that too has become automated, adviser firms have instead harnessed the technology to their advantage, which has allowed them to provide a higher quality client-adviser relationship.
It may seem strange, but the automation of traditional financial advisory roles has pushed more people in the sector into the business of providing advice. From broker-dealing to insurance, providing advice and developing the client relationship has become the focus of their business. While the technology has allowed customers to invest independently, and more recently, even provide rudimentary advice based on the input of financial information, major financial decisions still require the advice of a financial professional.
The concept behind something like ‘robo advice’ works for advisers too. Providers like https://www.intelliflo.com/ recognise this and have put together specialised software for financial advisers, automating everything from profiling new clients to compliance to back office tasks, freeing up more time to spend providing advice for their clients.
Smaller, specialised firms
While robo advice is being adopted as an additional service by banks like https://www.ftadviser.com/investments/2018/12/04/hsbc-launches-robo-adviser/ HSBC, smaller, independent advisers are proliferating and thriving by using the very technology that had threatened to replace them. Rather than develop a one size fits all approach, they’re specialising in servicing clients with specific needs.
Stronger client relationships
Far from eliminating the role of financial advisers, the automation of the financial advisory industry has allowed them to evolve in a way that puts the client relationship at the heart of everything they do.