FPA urges fintech-driven efficiency

24-Nov-2017

By Sarah Kendell

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Financial planners need to make better use of fintech to improve efficiency when it comes to developing client strategies and statements of advice, with more than 100 technology solutions now available on the Australian market that automated some part of the advice process, according to the FPA.

The association’s new white paper, ‘Mapping fintech to the financial planning process’, reviewed the products on offer and found 117 solutions related to financial advice, including 54 products that automated multiple advice steps, 11 that allowed an adviser to assess a client’s financial circumstances and three that focused specifically on SOA generation.

At the same time, it revealed the average time taken to deliver a full financial plan to clients was currently 26 hours, with costs of up to $6000 per client, underlining the opportunity for advisers to automate data collecting and processing, according to FPA head of policy and government relations Ben Marshan.

“[The planning process] doesn’t have to take that long and it doesn’t have to be that expensive to produce either – the tools are there and there is a fairly even spread across different parts of the process when you take everything into account,” Marshan told financialobserver.

“These tools can make things significantly more efficient and you often don’t even need to touch the data anymore to get it from one side of the advice process to another.”

With the shift toward goals-based advice evident in the industry, Marshan said one area that fintech companies had yet to focus on was goal-setting, with just one provider – Capital Preferences – offering tools in this space.

“There are things around goal-setting in particular that probably need a bit more focus, because there is a lot of efficiency you can do around goal setting that a fintech could make a great product out of if they wanted to take up the challenge,” he said.

While 20 per cent of advisers surveyed in the paper said they had seen their client engagement improve through fintech use, Marshan said there were many other process improvements in this area that practices could adopt with the help of fintech tools.

“On the client engagement side you only have to look at the statements of advice that people are putting out to know that that is not a particularly engaging and good client experience,” he said.

“There are tools out there to produce digital SOAs that are engaging, that have videos and audio and fact sheets, so planners need to think about the fact that we are in 2017 and we want to be using technology that is modern and not something that was created in ancient Egypt, being the piece of paper.”

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