How technology can help to fill the TRUST gap

, 13 August 2020

Adviser gap

We are constantly reminded that there is an advice gap within the UK. Research from BlackRock in 2017 found that there were 26,700 UK registered financial advisers. If each of those worked with an optimum number of 100 clients, it means that just over 2.5 million of the 53.5 million adults in the UK at that time had access to an adviser.

Boring Money’s recent Advice Report 2020 revealed that just 9% of British adults have a financial adviser, with more than half of these over the age of 65. The report highlighted that there are currently around 11 million adults in the UK with pension and investment products, but no financial adviser. That’s a scary statistic.

Despite its name, Boring Money’s report (summarised in this article published on Interactive Investor) is a great read. It reminds us of what could probably be described as one of the biggest challenges our industry faces: trust.

It’s no wonder that prospective clients find it hard to trust advisers in our industry. During prime time TV you see adverts with the strapline “Don’t let a scammer enjoy your retirement”. You read headlines in the press like “The very real horror of losing your money”. And, this weekend, I heard an advert on the radio asking whether I have been mis-sold a stocks and shares ISA.

As Hannah Smith quite rightly points out in the article linked above, should we be referring to it as a trust gap rather than an advice gap? And what can we do about it?

What technology has taught us during lockdown

We are a robust industry. We’re used to dealing with change – some gradual, some not so much. We’ve been introducing technology into our businesses for years but, for many, lockdown has accelerated this. It has taught us that:

Video conferencing offers many benefits, particularly when the software used can be incorporated into your CRM to create even more efficiency

  • Automation creates efficiencies
  • Embracing technology and automation means it costs less to service clients
  • Adoption of technology creates efficiencies
  • Instant messaging and video conferencing software help us keep in touch with our staff and colleagues, boosting morale
  • Happy staff and greater efficiencies = more time to service clients
  • More time means we can take on more clients.

Perhaps those extra clients will be from the 11 million with pensions and investments in place but no financial adviser?

Education the key to building trust

I recently attended a webinar hosted by Catherine Morgan of The Money Panel. I had joined Catherine’s Facebook group, Financial Coach Community for Financial Advisers and Financial Planners, and the content in the group piqued my interest.

I speak to advisers and planners every day, coaching them on how to incorporate cashflow modelling into their advice process and how to use the tool to help engage and educate their clients. So, I am always interested to hear what others have got to say when it comes to the education of clients.

As an industry, that is how we build their trust. We provide clients with information and educate them to make informed decisions. Rather than trying to predict the future, we help them prepare for the future.

How cashflow modelling can help you educate your clients

Clients are looking for empowerment and understanding. They want to avoid financial mistakes and ultimately, make sure they and their family have sufficient funds available for the future. The introduction of technology into this equation is where real value can be added as their attitude towards online finance is changing.

You can empower your clients by giving them access to their information 24/7, perhaps by introducing them to a portal such as that offered by Intelligent Office. The Personal Finance Portal (PFP) provides clients with a secure online hub from which they can access their financial information and interact with their adviser.

Intelliflo’s eAdviser Index analyses the 2,500 firms that use the software and has found that those which have adopted the technology the most have, on average, doubled their number of clients.

At i4C, we’ve seen firms who have adopted a good cashflow modelling tool experience immediate efficiency and productivity gains. These firms are using cashflow modelling tools to empower their clients. They’re using visuals to demonstrate to clients the value of ongoing financial advice. And the graphs demonstrate ‘do nothing’ versus ‘do something’ and all the ‘what-if’s?’ in-between.

Introduce cashflow modelling into client meetings to help your client feel a part of the financial planning process.   Show them that you’re not hiding behind industry jargon or reams of paperwork and that you’re fully transparent with the fees you charge. Demonstrate you’re proud of the value that you bring.

Using appropriate technologies in the right way will allow you to take on more clients and help bridge the advice gap.  How many of the 11 million do you think we can help?

To talk to us about the benefits of cashflow modelling, email sales@i4c.technology or call 020 3308 9448.

This article was written by Carly Robbins, Client Cashflow Solutions Consultant. It was first published in Trust Adviser Magazine (August 2020 issue).