Technology is playing an ever-growing part in financial services. It can help take away some of the administrative and regulatory compliance burden from advisers, while delivering an ‘always on’ service expected by many clients today.
Advisers facing the squeeze
The FCA’s recent preliminary intermediary market data for 2018 clearly showed the squeeze faced by advisers, with pre-tax profit as a percentage of turnover falling in aggregate. The bigger a firm is, the less money it makes as a percentage, suggesting difficulties in offering regulated advice efficiently at scale, with rising regulatory costs and professional indemnity insurance bills undoubtedly contributing factors. This profit squeeze adds to the headache that firms face in needing to invest in the technology to drive efficiency gains and fuel business growth without overspending on unnecessary systems.
Providers easing the burden
Solutions offered by providers can go some way to help ease the technology burden on advisers. Secure, reliable platforms and provider portals have for some time provided digital administration tools for advisers, simplifying application and ongoing management processes and improving access to information. Yet even today, some providers often require wet signatures and printed application forms to authorise certain procedures. This can create delays in performing relatively simple actions and add to adviser costs, time and resource.
Thankfully, many providers are making significant investments into developing automation and straight through processing, reducing paperwork and minimising the number of clicks it takes to get to the required data. For instance, GBST has been working closely with Vitality to develop a user experience that allows advisers to spend less time on administration and more time helping clients. Launched in June 2018, VitalityInvest was the first client to go live with our new Catalyst digital platform, a highly configurable, customisable solution that uses the latest industry standard REST architecture.
Using Catalyst for the front-end web portal and our award-winning Composer back-office solution for the policy administration wealth platform and illustration engine, VitalityInvest provides advisers with the ability to onboard and service their customers and access illustrations, applications, transfers, client management and document storage, all via a simple, secure online interface. Advisers can switch seamlessly between desktop, laptop, tablet and mobile, to view data in real time and update records on the go, reducing the need to print information before client meetings or call Vitality for updates.
Evolving technology eco-systems
However, provider solutions can only go so far. According to research by the lang cat, only 5% of advisers said most of the tools they used were hosted on provider platforms or websites. Around a fifth used an even mix of provider and independent tools, while two fifths preferred to use independent software alongside some provider tools. Clearly, technology for financial advisers is becoming less about one size fits all and more about an eco-system of different solutions that supports their specific business model.
When different systems don’t link together, the need for manual processes can lessen efficiency savings and reintroduce the potential for human error. Integration between the provider’s technology and the adviser’s back-office systems is therefore becoming more and more important.
Forward-thinking providers like Vitality are embracing this need for integration to generate a holistic view of a client’s overall financial position. Catalyst’s REST API gateway layer enables integration of Vitality’s own life and health systems with GBST and other third-party systems. This connectivity allows seamless movement and search between systems to provide a single view of the investor’s policies. Applications and ongoing account management is completely paperless, with data pre-populated from other systems where available to remove the need for re-keying.
GBST and Vitality have been shortlisted for best use of technology in the Schroders UK Platform Awards for the development of the VitalityInvest platform, illustrating the success of the collaboration and positive feedback received from users.
Technology of the future
Looking to the future, we expect changing regulation like open banking and the pensions dashboard to encourage providers to offer a more joined-up experience of an individual’s finances, pushing the ability to integrate different systems through compatible technology gateway layers even higher up the provider agenda. Personalisation will also become increasingly important. Vitality already offers the ability to customise dashboards to show preferred information, so advisers and paraplanners can quickly access the details they need most often and work more efficiently. Different dashboard functionality and layouts can also be set for different types of user, allowing clients to access certain information like policy details and investment valuations, which can be overlaid with commentary from the adviser to provide a more engaging customer experience.
We expect this trend to continue as more providers utilise ‘big data’ to create a more insightful experience. The ability to aggregate and analyse huge swathes of data on a customer and combine it with artificial intelligence will allow providers to take the customer through their own unique journey based on their circumstances, needs and preferences, with content personalised based on smart data analysis.
Technology is helping to transform the advice industry, creating administrative efficiencies and reducing costs while supporting regulatory requirements and reducing risk. Allowing advisers to focus on clients.
For investment professionals only. VitalityInvest is a trading name of Vitality Corporate Services Limited. Vitality Corporate Services Limited is authorised and regulated by the Financial Conduct Authority.