Are you considering a hybrid advice model for your business? Wealth Wizards’ Simon Binney provides a valuable insight into how advisers and wealth managers are using digital-first and automation platforms to grow and future-proof their firms.
What is hybrid advice?
In a nutshell, the hybrid advice model helps firms automate processes and digitise the advice journey. This makes a firm’s processes more efficient, compliant, and cost effective. It frees up staff time– including advisers, paraplanners, and compliance officers –meaning they can focus on the aspects of the advice process that add real value for the client, i.e., their financial goals and aspirations.
Digital services can offer self-serve, simplified guidance, and simple advice such as for ISA and pension top-ups, through to full hybrid advice, where machine learning, aligned to a firm’s advice policy, can accurately direct the client through the best advice route for their needs. Hybrid can be used for retirement planning, pension guidance or wealth accumulation through an investment strategy.
This includes a process where clients with more complex circumstances, or higher wealth levels, can be offered an automated approach, but with the adviser very much co-ordinating the process and the relationship.
It makes the customer journey more intuitive, convenient, and tailored to their needs, while giving the advice business the ability to take on more clients at the wealth level that aligns with their business strategy and revenue goals.
Importantly, in an increasingly digital-first world, it enables advice firms to interact and attract the younger generation of wealth accumulators to become clients, and deal with them profitably, helping to sustain and grow the business.
When assessing whether hybrid advice is right for your business, the first step is to look at your current challenges. In our experience there are three key challenges facing advice firms:
1) Onboarding and suitability report writing processes that take too long and tie down advisers, paraplanners, and compliance officers in significant amounts of unnecessary work.
2) A technology stack which isn’t integrated and requires considerable manual input – typically in re-keying information between systems which wastes time and risks errors
3) Inconsistent processes and practices, again wasting time and causing compliance headaches.
Invariably these constrict a business’s operations, tying up staff in costly, non-value adding tasks, and restricting the ability of the business to improve revenue and profitability.
Is hybrid advice right for my firm now?
The next step is to ask whether your business could benefit from implementing a hybrid advice model now. Apart from the need to address the issues we’ve raised above, here are some key points to consider:
• Would your business benefit from improvements in productivity, including increasing the volume of cases individual advisers are able to serve? By adopting our Turo platform, we have seen our clients’ at-retirement case time decrease from an average of over 35 hours to complete, to under 9 hours.
• Suitability reports can largely be self-populated from the fact find, including validation of data and automated fund recommendation. This reduces a 6-7 hour process down to as little as 35 minutes. If this was happening in your business, how many more cases could your advisers complete?
• Do you want to attract, cost effectively and with minimal adviser involvement, mass affluent clients with digital onboarding, so you can nurture them into life-long clients?
• Are you looking to attract the next generation of wealth accumulating clients, who have expectations for a digitally enabled, flexible advice service, as part of your growth plans?
• Looking at the next 5, 10 and 15 years, do you want an operational model that can help future-proof your business?
If your answer to any of these questions is ‘yes’, then you will most likely benefit from a digital-first, hybrid approach to advice delivery.
Ensuring the right fit
Once you’ve identified your challenges and the opportunities open to you by adopting a hybrid advice approach, it’s time to find the right system and provider. Key pointers on what to look for include a team with experience of successfully delivering hybrid advice technology to the market, including experience of the regulated financial advice market and its operational nuances. Other pointers include an implementation process that is clearly laid out in advance; a provider that can clearly demonstrate how their proposition has profited its clients and crucially, how hybrid advice will fit with your business plans.
Implementation – choose a modular system
One of the key fears for businesses when looking to implement new technology is the impact on the current daily workflow. The last thing a business needs is to have to stop trading while it implements a new system.
Using a modular solution (like our Turo hybrid advice platform), a business can start small, introducing functionality gradually over time, tackling the immediate challenges first and training a small number of advisers at a time so that there is a smooth and non-disruptive transition from traditional to hybrid.
The future is now
In 2022, we are already seeing strong signals that the financial services sector is taking advantage of the technology evolution to increase its client capacity and revenues. This is leading to an increasingly digital-first and automated proposition that customers expect to see.
As a result, we would argue that researching and learning more about hybrid advice, should be at the top of the ‘To Do’ list of any large advice firm that wants to be successful in the market in the years ahead.
To learn more about how self-serve and hybrid advice and grow and future-proof your business, please contact me at email@example.com
For further insight on digital and hybrid advice, visit our blog.
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