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From Jurassic to fantastic: A transformative era in financial advice

In the once prehistoric landscape of financial advice, a seismic shift has occurred.

The joint forces of client expectations, regulation and technology have driven advice firms to embrace new ways of working.

No longer held back by lumbering, static and outdated technology, the more forward thinking have adapted, adopting a new-model tech ecosystem that redefines adviser client relationships.

The journey began some 15 years ago at a time when platforms delivered only static online access for end-investors. They were narrow in their functionality, covered a fraction of an advice firm’s proposition and had limited white labelling. The net result was poor client engagement.

Recognising these limitations, fintechs began to modernise client-facing technology and introduce client portals delivering total net worth reporting. For the first time, advice firms could aggregate clients’ finances in one place.

Meanwhile, a cohort of clients began to engage with online access to their information and see portals as a trusted place for everything financial. Two-way document sharing offered them a secure vault for all their important paperwork, and the adviser a better delivery mechanism for the vast amount of paperwork our industry still produces today.

As we hurtled into the mid-2010s, the exponential adoption of smartphones meant clients wanted easy access to their information on the devices they used. This velociraptor of the modern age provided a sleek, intelligent companion to navigate the digital world.

Desktop-only client portals were no longer good enough and advice firms could now get their own branded apps for IOS and Android – enhancing their brand and making it easier for clients to engage with them.

Data aggregation was expanding but platforms and providers remained slow to integrate, offering daily valuations at best and with few offering richer data such as transactions, performance or documents. These legacy giants would soon be overtaken by a new breed of agile platform that would challenge the established players with open-architecture, API-based technology.

In 2018, two regulatory meteors came hurtling towards financial advisers. Mifid 2 demanded enhanced investor protection and greater transparency, while GDPR tightened controls on the way businesses can process and store personal information.

Client portals provided advanced security with robust encryption, two-factor authentication and biometrics. This meant clients could have secure 24/7 access to information, while automated delivery of reports or notifications could support advisers in meeting Mifid 2 obligations.

Then, as we approached the end of the decade, the global pandemic brought an unexpected ice age, swiftly and dramatically changing advice delivery.

Overnight, firms had to adapt. Working from home and video calls became the new normal, and use of e-signatures rocketed. From pterodactyls to technophiles, advisers evolved to face the challenges head on.

Enter the age of digital relationship management and a new era of hybrid financial advice, optimising the use of technology to support adviser-client interactions.

Over 2023, we’ve seen advice firms moving even further beyond traditional client relationship management with personalised content driving engagement at every level and tools ranging from automated on-boarding and digital fact finds to automated workflows, resulting in a more dynamic proposition for everyone.

As we head into 2024, this new era of advice looks even more exciting. Platform integrations are deepening to support transactional processes like account opening as well as the sharing of richer data.

Meanwhile, artificial intelligence will bring an evolutionary leap in how technology will shape the advice landscape through data-driven insights, intelligent automation and learning algorithms to personalise the client experience.

The evolution of client portals and the advent of digital relationship management has brought a fundamental shift in how financial professionals engage with their clients. This new-model ecosystem sets 2024 up to be another year of technology advancement.

This article was written by moneyinfo's Managing Director, Tessa Lee . The article was featured in:

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