Financial advice has traditionally been a paper-heavy, face-to-face business. The pandemic changed all that.
Today, advisers can be face-to-face and remote at the same time, while their clients can get the personalised financial advice they need without leaving their homes. And it’s a trend being driven largely by the clients themselves.
Diep River-based IFA Brad McWalter says practically all of his clients are happy to meet online. “I’ve always looked to use technology to automate things, build processes, and free up my time to do the important work of understanding my clients’ needs. Using technology to do the admin allows more conversations to happen. But there’s no doubt the pandemic was a massive inflection point for the move towards paperless and digital, for the industry, advisers and clients alike,” said McWalter.
No paper, no fuss
Johan Theron, MD of RS Financial Solutions in Cape Town, estimates that 98% of his business today is done digitally. “Going paperless and virtual has made our business 60-70% faster with no complications. Some of our older clients aren’t always familiar with new technology, but we’re engaging with them to help them go the digital route. It was daunting in the beginning, but you adapt, and our clients have just run with it,” he said.
Somerset West-based IFA Ivan Rogers has gone 100% digital in his practice. “I’m completely paperless, except for proposals and wills. I travel with my tablet, and make all my notes on it. My clients even sign their documents digitally. My assistant works from home, and always gets the job done. It works well for us and our clients,” said Rogers.
The virtual advice model delivers the best of both worlds. It provides the high level of personal service that most consumers value from their financial adviser, while using digital tools to simplify parts of the advice process. “We’re digitalising advice, not automating it,” says McWalter.
Bidvest Life’s Chief Information Officer, Titi Ngubane, says the move towards digitalisation, both on the side of insurers and advisers, is playing a major role in driving down the costs of doing business, while delivering better client experiences.
It’s not only digital behaviour that’s changing, though. Thanks to the power of the internet, today’s consumers have access to far more information than in the past. There’s also been a change in how they construct their portfolios, with progressive insurers and advisers driving a shift from a traditional lump sum approach to monthly income benefits across all risk events.
“With income protection, you don’t need to make as many assumptions as you do with lump sum cover. You just simply cover the client for the same amount as they earn and the rest takes care of itself. That’s where the income protection conversation is really gathering momentum and changing the game,” said Theron.
McWalter says that, while before the pandemic, clients would start discussions with their investments, today life insurance and investments have the same weight in a conversation. For Rogers, the starting point of any client engagement is about building the foundation, with their most important asset being the ability to earn an income. “You can’t save for retirement, or meet any of your financial goals, if you’re not protecting your income. It’s as simple as that. I drive this point all the time,” he says.
But while technology is automating many of the aspects of the insurance process, the role of the intermediary will never go away, says Theron. “Technology is transforming many aspects of the industry, and making it faster, more affordable and better for everyone. But bots and AI will never be able to fill the space of a real person who walks a journey with a client, understands their needs, and crafts a solution just for them,” he says.
McWalter talks about “two balls of light”: one is the client, the other is the adviser. “Anything else around that is a tool. Tools that provide cost efficiency and value will succeed. But the relationship will always be the most important thing,” he says.
For Rogers, the effects of technology have changed his business. “I love the changes, and how technology has made our clients more clued up on what we offer, and what a true financial adviser actually is. The ease and speed at which business is being done now makes life so much easier. My practice has grown a lot, and technology has been a big factor in that.”