Zurich adviser ‘think tank’ says financial coaching is the way of the future
Richard Dunkerley
Financial advisers have an opportunity to elevate their services into that of ‘financial coach,’ making themselves as relevant to their clients as other lifestyle professionals, according to a new whitepaper by Zurich Life & Investments.
BusinessFIT: Navigating toward the advice practice of tomorrow, launched yesterday, is based on findings of a workshop which included some of the industry’s most progressive and successful thought-leaders. It considers the fundamental characteristics of prosperous advice practices over the medium-long term, to 2020 and 2025. This is in the face of changing consumer demographics and demands, increasing industry regulation and advancing technologies.
The four main recommendations are:
- Advisers need to consider how to shift their service from one of ‘technical specialist’ to one of financial lifestyle coach, relating money and wealth goals to their clients’ lifestyle aspirations, objectives and passions. This becomes particularly important as the values of target audiences change, appreciating experiences as well as things, for example. This trend is becoming more common in Millennials who are being forced to rethink home-ownership as the great Australian dream, and Baby-Boomers who are looking to enjoy their retirement with greater health, hobbies and travel.
- Advisers need powerful back office technologies to support increasing regulatory demands. Ever-increasing regulatory requirements and greater demands for transparency means that successful advice practices will have no choice but to invest in technologies that can automate reporting. Those practices can install the right technologies – within their businesses and through their dealer groups – to efficiently support these administrative requirements, will also be able to dedicate more focus to client consultations and outcomes.
- Clients will still demand the ‘human touch,’ but emerging automated technologies can play an important technical role. Artificial intelligence and robo-advice, amongst other emerging technologies, may be able to model portfolios much more quickly than an individual financial adviser, and so they have the potential to play an important role. This will not, however, supersede the human relationship between financial coach and client – the building of trust and relationship, emotional intelligence and the translation of lifestyle aspirations into monetary and wealth goals.
- Consider scalable digital solutions to keep in touch with ‘roaming’ clients, facilitating ongoing communication from wherever they are located. Beyond the ‘human touch’ of a face-to-face appointment, this involves having tools that clients can engage with whilst they are on the go. This might include an app that provides real-time updates on their portfolios, but also let’s them scenario plan, seeing the potential impact should they save or invest more money each month, or change their investment ratios or strategy. By private-labelling basic financial apps, advisers can give clients the opportunity to be as hands-on or hands-off with their money as they please, while still having the trust and personal guidance of a professional financial lifestyle coach to build a wealth strategy in line with their life aspirations.
Zurich’s BusinessFIT whitepaper was developed with the input of workshop participants including Jessica Brady from BT Financial Group, David Clark from Koda Capital, Tim Deamer from Crosbie Wealth, Peita Diamantidis from Caboodle Financial Services, Matt Heine from NetWealth, and Adrian Patty from AP Financial Services, along with futurist Anders Sörman-Nilsson.
In summing up one of the main recommendations, Peita Diamantidis, said, “Our industry can be under a misnomer that money is the point for clients, when it’s not; lifestyle is. There is a great opportunity to change the way we’re approaching financial planning to relate it in terms of dreams, hopes, motivation, inspiration.”
Tim Deamer, Director, Crosbie Wealth Management said, “Clients want to be excited about their financial futures. The sale of a product is irrelevant to them. Having tools that they can engage with are important, so when they interact with their adviser, they feel as though they are being supported on their journey.”
This research is the latest in a series sponsored by Zurich which is dedicated to supporting the continued success of the financial advice industry in Australia.
Richard Dunkerley, Head of Marketing and Communications at Zurich Life & Investments, said, “In the face of increasing regulation and ongoing pressure on the advice industry, we wanted to bring together some of the industry’s best minds to consider what opportunities there were for advisers servicing some clients through their retirement, but also engaging the next generation – the lucrative but relatively un-tapped Millennial market.
“What became clear – in considering changing lifestyles and demographics – was that people still value money and wealth, but as an enabler to reaching other goals, and this provides an opportunity for advisers. The role of technology is also crucial – both for reducing the administrative burden of reporting and regulation, but also to service clients in between appointments, and from wherever they may be based.
“Harnessing evolving technology, and speaking to clients in values-based terms, offer exciting opportunity, according to our think tank of thought-leaders,” he said.
