I was recently asked to speak at an innovation forum where the topic for discussion was the future of financial advice. When they referred to the future in the speaker brief, they were not talking about the next two to three years, but five to ten years’ time.
Like many people during this festive season, I have struggled with the ‘What to buy at Christmas’ conundrum. Last year we bought my father, who is in his 60s – the new ‘middle age’, an iPad with the full expectation of it still remaining in the box it came in this Christmas.
But on the very morning the speaker invite arrived, he had Facetimed the children over breakfast, then emailed me to ask if I thought Invesco Perpetual Income was still the best fund for his ISA. This was all followed by a call to see what I thought about it, although he was more interested in what I really thought about his email than the actual fund choice. And all from a man who until very recently was adamant that the only way to manage his financial affairs was to go into branch on a Friday and withdraw what he needed for the week ahead from the cashier. In the same vein, he only spoke to his financial adviser when necessary.
It is not just my father who is turning to technology. A recent survey suggested that six out of ten teenagers are not learning about handling money at school and will look to social media in the future to bridge that knowledge gap.
So with the morning’s events in mind, I accepted the invitation.
Fully aware that, without a crystal ball, the chance of my making any correct predictions was slim, I comforted myself that I would be in good company. After all, in the 1800s in London, the biggest challenge for the brightest engineers of the time was the amount of horse manure they needed to deal with in the city as the population grew. At that time, nobody foresaw the rise of the motor car.
While I won’t delve into the details of the innovation forum discussions, which did venture into quantum computing, big data, virtual money and social advice, the outcomes and predictions from all three speakers from the different markets of retail, utilities and financial services were remarkably similar.
The need to innovate and have the ability to try new innovations quickly to react rapidly to the changing market is imperative to survival. If a process can be automated through technology, it will be and it is only a matter of time until it is.
Leading businesses will have core technology capability at the heart of their organisation and the ability to permeate this through to all users seamlessly. Those providing a true omni-channel servicing model where the consumer is in control of how they wish to engage with the business – rather than the business dictating how they engage with the consumer – will lead the way, gaining first mover advantage.
For financial advice the challenge will be to provide an omni-channel engagement model between the administrators, paraplanners, advisers, employers, employees and, most importantly, the consumers – where every party has a single view of the information they need to make decisions and do what they need to do.
While five to ten years may feel like a long way out, and who knows if the next motor car or World Wide Web might be looming just around the corner, the financial advice market certainly needs to put innovation at the heart of its being. We need to adopt technology faster, learn from it quicker and adapt more rapidly in order to remain viable and competitive in both the current and future marketplace.
For further insight and predictions, view my latest video at www.talented-innovators.com/backtothefuture
About the author
Head of Strategy and Propositions — SSP Select and SSP Adviser. “What interests me is understanding how the financial services and general insurance sectors are evolving and helping clients respond to the challenges that this brings. I really enjoy working with clients to identify the business and operational drivers of value and then designing and delivering innovative insurance solutions that help them to meet tomorrow’s challenges.”More content by Sham Gill