How can advisers ensure they stay ahead of the curve when it comes to new solutions?
Ignition Wealth’s Richard Liverpool looks at the future of advice tech and how advisers can ensure they stay ahead of the curve when it comes to new solutions.
Technology is constantly evolving and financial advice tech is no different. There are myriad solutions available and it can be challenging to keep up to date with the changing advice landscape.
Ask many advice business leaders what keeps them awake at night and nine times out of ten you’ll find it is technology running-costs and operational risk. Advice firms are spending a significant amount of money to keep their competitive edge and address the ongoing challenges of compliance. Growing their team to handle this workload means more licensing fees, development and maintenance costs, and in many cases IT professionals to look after it all.
It has never been more important for advice practices to keep a pulse on their IT solutions – this includes having a long-term plan, and staying up to date on new offerings and features as they come available.
The uptake of advice and planning software has accelerated to a point where it’s no longer a question of if you are using smart technology to support your firm, but how you’re using it. For example, this applies to your firm’s use of XPLAN, Australia’s leading financial planning solution.
For the majority of practices, it is impractical and financially unjustified to have full-time tech support in house. And if you do have one, how do you know whether they have the skills needed to fully support your advice tech needs – now and in the future?
An outsourced consultant with a deep level of expertise in XPLAN and other advice tech can help you utilise it to its full potential – with clarity, strategy and the right tools. Further, a good consultant can provide visibility to what’s on the advice tech horizon; essential to future-proofing financial advice businesses.
Key reasons to engage an outsourced consultant on advice technology
Cost-effective over the short and long term
As a client adviser, the following phrase is one you’ll be familiar with - the first rule of prosperity is to save on unnecessary costs.
Outsourcing your advice tech to an external consultant can reduce your operational costs – for example the costs of management oversight, employee training, and superannuation - by 20 percent from the outset. You’ll benefit from leaner overheads, bulk purchasing, and leasing options for software and licenses whilst allocating resources efficiently within your practice.
Over the longer term, it can increase revenue and uncover hidden efficiency benefits that you were perhaps not expecting, leading to improved profitability for the business as your team are now supporting sales not admin.
Meet compliance requirements
An outsourced solution can consult you on how to use your advice tech to meet compliance around things like Best Interest Duty and Fee Disclosure Statements.
Enables your firm to focus its resources on what it does best
It is neither practical, nor possible to be a jack-of-all-trades. Often, it’s a lack of knowledge that holds practices back on advice technology, as it can be difficult to navigate andmanage.
Similar to what you say to your clients - “engage me and I give you the expertise” – an outsourced solution can give you the same advantage.
It can free your firm’s internal resources up from potentially “lower value” work and enable them to focus on higher value work – advising clients, strengthening relationships, and bringing in more business.
Exposure to professionals who understand “what’s next”
As technology marches forward, fewer in-house IT staff will have the skills to maintain legacy advice technology on behalf of the business.
Outsourcing to an advice tech specialist has the advantage of typically knowing what advice tech you should implement and what you shouldn’t. This can dramatically reduce your risk of implementing a something that either doesn’t provide what you need or isn’t providing efficiencies for your firm.
You also gain the added benefit of the collective experience of a team of professionals, as opposed to a single or small team of internal resources. As well as offering an external, outside-in perspective with strong financial industry knowledge, they’ll be able to gauge where you are along the continuum in context of your competitors, as well as new tech and features in the pipeline.
Finally, they require their employees to have proper industry training and certifications so you can be confident in the advice you’re provided.
Potential to increase overall business value
Failing to embrace new technology platforms and leveraging the full potential of an advice tech solution could erode business value.
To a business owner who may one day hope to sell the firm to a successor to secure a comfortable retirement, outsourced solutions can help you tap into yet-unrealised value.
Complements agile businesses
The advice industry is being disrupted by a number of new and emerging players.
Outsourcing is complementary to agile business; it’s flexible, allows you to adapt alongside your business needs, and keeps your offering ahead of the curve. Vendors have multiple resources available to them, while internal IT staff may have limited resources and capabilities.
When it comes to being across the broad spectrum of innovative developments, consultants will be able to recommend new solutions such as digital advice or new regulatory changes. Keeping up with this continually evolving space is challenging for an in-house team who is likely to only be experts in the legacy system they service, mainly due to time and budget restraints.
Tech disruptions are not your problem
Without an external partner, it could take in-house IT weeks to fix a large tech issue. Engaging an external consultant means your firm will no longer have to manage any disruptions or outages. A good consulting firm can and will throw numerous resources at your disposal to fix the problem quickly.
Choosing a consulting partner
There are numerous consulting partners that can help you tailor your advice tech to your practice’s specific needs and get more out of the software.
Choose a consultant with the following features to ensure you engage the right one for your business.
Uses an individual approach
There are solutions in the market that typically use a cookie-cutter approach for cost efficiencies, without paying enough detailed attention to what makes your firm different from your competitors.
Select a solution that takes the time to get to know your practice, and what makes it unique.
Has deep knowledge and expertise
Your advice tech is essential to your entire business. Be sure the outside vendor is qualified to take care of your greatest needs.
Further, choose a provider that has been in the game for the long-haul. Long-term financial industry partners not only have a deep understanding of the operating environment, they share the same industry challenges and opportunities. Look at the individuals within the business – consider a consulting solution that can offer insights, skills and experience across a range of specialised areas. And find evidence it’s looking forward at what’s to come in the advice tech space.
Better still, look for a solution with a local Australian team who will understand the industry context your business is operating in.
Is adaptive and works with your business the way you need it to
Some firms may wish to keep an internal resource they trust and plug in a consulting partner to provide additional educational value and support. However, you choose to structure the business/consultant relationship, choose a partner that will work collaboratively with your wider team.
Provides on-demand assistance
Issues can and do happen. It is important to identify them quickly. Any breakdown to your advice tech solution can have a direct impact on business efficiency. Choose a partner that will throw enough resources at an issue to fix it.
Advice practices should look for a solution that assures a fast, efficient, same or next-day response, technical or customisation support, and data integrity reporting.
Prioritises security
It’s one thing to know that your own system is secure – but what about your consulting partners?
Look for a solution that has bank-grade security and complies with key national and international regulatory legislation. It should also be supported by ongoing auditing, monitoring and annual certification by an independent third party authority.
This should be one of the key things you factor into your decision as your and your clients’ data security is of the utmost importance.
Has innovation at its core
It’s easy for consultants to stay up-to-date with advice tech innovations, but it’s another thing for them to truly understand how this technology can benefit your business or how to effectively integrate it.
A consultancy that lives and breathes innovation understands the challenges that your business faces in rolling out new tech and can help make the process as simple as possible for you, and a seamless experience for your clients.
As technology advances and the advice industry continues to be disrupted, practices must have the solutions and support or risk a situation where they’re bound to legacy technology. A consultant that can not only provide advice and assistance to the current advice tech platforms, but that is continually looking at “what’s to come”, will become a vital business partner in the future.
