Marilyn Cole outlines the most significant technology and design trends that could have an impact on adviser businesses and to which you should therefore be paying attention over the coming year

At Space, we have been discussing the most significant trends in technology and design that could and should have an impact on adviser businesses as we enter 2018. Although we do not see anything changing overnight -even where there is a big regulatory shift – these are the 10 trends we think advisers should be paying attention to in the next 12 months and beyond.

1 Regtech And The Age Of Data

‘Regtech’ has been a huge topic in banking, insurance and asset management for the past two or three years and it may be about to impact the advice sector too. The use of technology to meet regulatory requirements is a key reason why the investment industry is coping with the unprecedented data demands about transaction reporting imposed by MiFID II.

MiFID II should usher in the age of data in financial regulation with the FCA keeping a much closer eye on the big trends affecting markets, market participants and retail investors. It is increasingly likely a host of compliance matters in the retail market itself will also be policed by regtech.

There has always been a bit of concern about the ‘computer says no’ from advisers, but hopefully it is much more likely to say ‘the advice is sound’ and do so more swiftly, leaving the trickier compliance decisions to human beings.

2 Robo, Maybe – Digital, Yes

Just as Darth Vader once rather bluntly pointed out to Luke Skywalker how he was getting more like him – what with the robotic arm and everything – advisers are increasingly becoming digital, almost without noticing it. No-one is going to be implanting a micro chip in your head any time soon, nor handing you a light sabre for that matter.

Yet advice processes, probably aligned with regtech, are going to become increasingly automated with clients also providing more information online (see Trend 5 below). This should allow human advisers to add real value with people skills, intuition and more. It does also require advisers really to understand their processes so they know which parts to automate.

3 Digital Should Help Firms Reach The Mass Affluent

It is our view that all this digitisation and automation may allow some adviser firms to crack the mass affluent market in a more business-sustainable way. That is the ambition of some of the adviser firms we speak to and tech is at the heart of this. The advice gap is unlikely to narrow significantly just yet, however.

4 The GDPR Comes Into Force

We have seen talk of New Year nightmares involving the General Data Protection Regulation (GDPR), which comes into force next May. Our own view is that businesses should already be managing the security of client data and using data fairly, so embracing a lot of these requirements with a proper data strategy makes good business sense.

There are bigger challenges for larger advice firms with significant back books. Yet GDPR may provide those firms with a very good reason to check the quality of that data and thus whether those old customer interactions really are worth revisiting.

5 Age-Responsive Design

There has been a huge amount of work done to ensure anyone accessing a website receives the optimal experience, regardless of the device – be it laptop, tablet or smartphone. Now those who worry about user journeys are increasingly looking beyond the device to the person using it.

Designers are asking whether a particular approach is ‘age-responsive’, which does pose some interesting questions for financial advisers and planners who are either advising clients much later into their financial lives or who have set out to reach younger clients.

It certainly is not just about bigger type sizes or employing millennial-friendly language. We think the key will be to bring your clients along with you rather than offer them a different option, simply because they are older or younger.

6 Encrypted Emails And More

We talk to many advisers who say that security of client information is a vital component of the service they offer. Big companies have seen all manner of data breaches hitting the headlines. As one adviser contact of ours said recently, the era of “just pinging emails about”, really is over. More adviser communications with clients will be encrypted. Yet advisers have a role in spreading good information security habits among their clients too. Why leave it all to Barclays Bank?

7 The Adviser As Gatekeeper

Adviser firms want to be seen as the main gateway for clients seeking access to their portfolio and other financial information. This needs to be secure – see above – but, in addition, we hear of advisers increasingly thinking about how their website fits around this gateway too in terms of their own branding and messages. This goes beyond merely white-labelling. The sites that will work best will integrate these portals into their own websites as seamlessly as possible.

8 Content Is No Longer King? Don’t Tell The Clients Reading It!

There is a huge amount of talk about the big financial firms effectively turning themselves into publishing operations. Some cynics now suggest it is almost impossible for smaller firms to get their message across given this ocean of information.

We still contend a content strategy that focuses on what your clients need or on what your prospective clients are interested in can be highly beneficial. Many people are interested in the knowledge advisers have to share – and arguably more than some of the big providers.

9 The Era Of Open Banking Data Starts Now

The era of open data begins this month although there are likely to be some teething problems. Customers are going to be able to grant permission to third-party financial firms to gain access to their banking data. Lenders and insurers are likely to be the first to take advantage yet it could also be a very significant step on the road to portable factfinds too. With all this data flying about, there is a big opportunity for advisers to consolidate their role as trusted intermediaries.

10 Understanding Bitcoin Or At Least The Related Technology

Don’t worry. This isn’t a call for you to pack your clients off to the nearest bitcoin mine. There is a big difference between highly speculative investment in a pseudo-currency and the potential for Blockchain, a digital ledger or something similar, to transform certain types of transactions. It is still something we all need to keep our eyes on.

Article by:

Marilyn Cole


9 September 2017

Searchers, choosers and reviewers – what do the FCA’s customer types tell us?

12 February 2018

It’s time to open your mind to open banking