Advice firms need digital tools that gain trust
While the COVID-19 pandemic has taught the world to interact digitally, it is still difficult to gain trust from consumers that need financial advice in a digital world, according to a panel.
Speaking on a SS&C webinar, Rice Warner head of superannuation, Steve Freeborn, said going digital was no longer a barrier to seeking advice but the challenge the industry faced was in creating a digital solution that consumers trusted.
“Consumers want hybrid advice that is interchangeable. So, I might start with the digital journey of self-help and digital learning. Then I want to talk to an adviser and seek that comfort of help of the assumptions I’ve made and what answers I’m getting. Then I might want to revert and do it myself in terms of the implementation,” Freeborn said.
“Or I might want to start with an adviser and then identify what’s required, and then take over and pick it up myself for a while. That ability to interact that interchange parts around the value chain are going to important.”
He noted that as consumers shared information, whether it was digitally or personally, they would want the advice provider to retain that information as part of the trust process.
“It should learn with me and I shouldn’t have to rekey that information next time I go online or want to update or make a projection.
“That is part of building trust – it’s taking information previously provided to build on what I know about you so that my next best question or action builds on that earlier knowledge. That’s an important part of it.”
Also on the panel, Shoreline Consulting managing director, John DiBiase, said there were few compelling solutions and from a provider perspective, it was difficult to come up with a model that was commercially viable from a cost perspective.
DiBiase noted that traditional players such as wealth managers, insurers, and banks, had legacy distribution issues when trying to integrate with digital channels.
Another shift for these traditional players was the cultural shift from being product focused to more consumer focused so they could provide customer-centric advice versus just selling a product.
DiBiase also said that when thinking about digital solutions it was important to recognise that customers generally needed to be prompted and held accountable to act on advice they had been given.
He said there was merit in using models deployed for weight loss systems and personal training in relation to finance and holding consumers accountable for their actions.
“Whether it’s having to front up to an adviser or use digital methods to prompt people to make sure they are acting out what they’re supposed to. Receiving advice upfront is correct but if you don’t act on it or follow through, especially if you need to follow the process of budgeting or generating investable cash there’s things you need to do regularly,” he said.
“That’s another part of the conversation here to providing tools that actually benefit the mass market in helping achieve financial wellbeing,”
Recommended for you
As the year draws to a close, a new report has explored the key trends and areas of focus for financial advisers over the last 12 months.
Assured Support explores five tips to help financial advisers embed compliance into the heart of their business, with 2025 set to see further regulatory change.
David Sipina has been sentenced to three years under an intensive correction order for his role in the unlicensed Courtenay House financial services.
As AFSLs endeavour to meet their breach reporting obligations, a legal expert has emphasised why robust documentation will prove fruitful, particularly in the face of potential regulatory investigations.
