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Financial advisers: there’s gold in those digital hills



Gone are the days when taking out life insurance was a major event. Advisers would meet their clients at their office or even their home. Take copious notes in their Filofaxes. Schedule follow-up meetings to talk through their options. Then they would spend half an hour signing a sheaf of documents, and the client would spend another hour being prodded and jabbed by a doctor for a medical report.

How times have changed.

Today, consumers want to take out income protection or life cover online, with no medical report. And if they do talk to an adviser, it’s going to be via video call. But far from making advisers obsolete, the digital revolution is opening up vast new opportunities for savvy advisers to scale their businesses and save time and money in the client acquisition and retention process.

This shift to a digital way of working is nothing new. In fact, it’s been on the cards long before Covid-19 turned the world as we know it on its head. As far back as 2015, McKinsey published a paper entitled ‘The Virtual Financial Advisor: Delivering Personalized Advice in the Digital Age’, which talked about the ways financial service institutions were gearing up to deliver advice from a distance.

The fact is that today’s financial advisers are at an inflection point. If they change the way they do business, and adopt the appropriate tools, they have the opportunity to align their businesses with the growing expectations of younger customers, while still offering quality services and building strong client relationships.

Apart from technology, the biggest driver of the shift to a digital world is the consumer themselves. They want client engagement to be convenient. For younger generations, they want to know that their adviser understands their own specific needs, and isn’t trying to sell them something they neither want nor need. They want to be able to track their cover by app and online, without even picking up a phone.

As advisers, you should be engaging in that way anyway. Today, digital is the way we all interact with each other and the world. We can be on four or five platforms and channels at the same time, with multiple screens. We may not like it, but we must adjust to where society is going and pivot our businesses accordingly. Society is certainly not going to adjust to us.

The fact is that the move to digital is good for everyone in the industry from a cost and time point of view. Let’s face it: the current model of doing business costs a fortune. Today, you may be able to see three or four clients face-to-face. Spend a couple of hours driving from coffee shop to coffee shop. By going digital, we can suddenly see seven or eight clients a day, or spend more time doing business development – and save R500 in petrol and another R500 in coffee and sandwiches into the bargain.

But aren’t robo-advisers going to take our jobs, you ask? Well, no. While the internet offers unlimited raw information, humans will always need context and perspective on their situation from someone else. They crave the understanding that comes from a trusted expert who can read between the lines, and use their knowledge to open up new areas of thinking they hadn’t even looked at themselves. Even in a digital world, it’s still all about the human connection.

But. Yes, there’s a but. It’s critical that we change our mindsets and believe in the required need to change. Advisers who aren’t prepared to change to this brave new world will fail. For advisers, it’s important to review your practice now, and define where you want it to be.

We’ve got to go back to the basics, and realise that relationships and building trust between clients and advisers is more important than product detail. Simple products that take care of specific needs are going to be key. We’ve got to get skilled at delivering digital servicing, and be able to operate remotely at 100% when required.

The world has changed. Thanks to technology and data, we still have businesses today. Our challenge is to make sure we combine this with the personal touch that has driven our success to date, to ensure we have businesses tomorrow.