This is the last post recounting the expansive discussion we had duirng our December Investment Forum with guest panelists Ray Adams from CashCalc, Jamie Sexton from True Potential, and Alan Easter from FTRC. In this section, we spoke about the role technology has to play not only in the fact-find process but in support all aspects of an advice business and reducing client costs.

You are never just giving protection advice to one person, but to a whole family unit who would be affected if that person became ill or died.

Ray Adams:

If I can just jump in there, if you’re giving advice to one person on protection, actually if that person dies you’re not just protecting him, you’re protecting the rest of the family. And I wouldn’t have thought many advisers listening to this would say “well, we only advise one half in the relationship.” The example I’m given to, is where you actually advise the whole family unit.

If the clients sign your agreement they’re under contract and you can keep their data.

Jane Hodges:

Also if both parties are signing a client agreement, you can hold the data for as long as you like. It’s not an issue that they’re under a contract with you to be a client of yours. It’s got nothing to do with whether you sell them advice or sell them a protection product, or you only advise them in one area or any one person gets an ISA and another person gets nothing. That’s irrelevant. If they sign your client agreement, they’re under contract. They’re signed for you to keep their data.

How do you remove data from your system if a client doesn’t want to follow your recommendation?

Alan Easter:

Having just spent three years trying to escape a law firm who are totally paranoid about things like data protection and GDPR, I think your question is extremely valid. But if we reframe it slightly, what happens with all the data you’ve collected when you make a suitability recommendation, and you have that rare recurrence where the client says, “no, thank you, I’m not going to follow your recommendation.” How do you then remove all of that data from your system? Because now you don’t have a legitimate reason for holding it because the client’s decided not to proceed with your recommendation. So for me, that’s where that check and balance needs to be.

Even if someone doesn’t follow your advice you have to hold the data because they can make a complaint later for not telling them to take out a type of cover, so you have an obligation to protect yourself.

Jane Hodges:

You can hold data if there is a reason for doing so. And for advisers, you can have a future complaint at any time. There’s no long stop on complaints in our industry, sadly enough, apart from going to have to work to a hundred to make sure they can then pay off anything that goes wrong. But the fact is that that means you can hold data as well. And even if you’d advise someone not to do something or you’ve still got to be able to hold that because they can still complain against you for not telling them to take out life cover.

So you’ve got some real obligations to protect yourself as a business in here as well. But I think the main issue that you’re talking about that pre-client agreement stuff isn’t the problem. It’s the prospect stuff that comes through, I think that is the issue and how you make sure that you’re not holding that data when you shouldn’t be.

The FCA issued a publication recently looking to reduce costs in our industry, so we need to be looking for places we can be more efficient.

Ray Adams:

You clearly know my views on the hard facts, what probably hasn’t come up is that the FCA issued a publication just a few days ago, saying that they’re looking at costs in our industry. And I’m sure they’re not looking to drive costs up. They’re looking to drive costs down. So we’ve got to get efficiencies in our business to enable us to keep it down. In the short term, we can become more profitable, which is great for us, but we’re also able to then pass those savings on.

As I said that one of my earlier answers about getting the client to do the fact find, I said, you’re saving an hour of our time straight away. So the cost is automatically lower. And Peter actually said he did his fact find and negotiated a third off his onboarding. So I think the FCA are coming in and saying, “look, guys, we’re looking at these costs”. We’ve then got to say, “look, we are responding and we’re going to drive it down”. So the key message for me is let’s do that. And touching on the intergenerational wealth, if we can get Alan’s son at 27 automatically using us, and if we can bring somehow Alan’s son and him into the conversation where we’re very likely to get the next generation, because we’re already engaging with them now.

For me it’s about seeing where the value of the adviser is, and it’s vital that we use technology to move the industry forward to support that which is what clients expect at this point anyways.

Now that we have to assess product suitability annually for MiFID, that’s going to be hard to do without technology. You can’t build a business to a large scale without building it around technology.

Jamie Sexton:


I think I said this a couple of days ago when we were doing the private call, I really think if you’re going to work on a model where you’re looking at lots of clients without using technology, it’s just going to be impossible. And I think you really need to look at where the true value of an adviser is. And for me, the true value of an adviser, isn’t spending an hour completing the fact find, and I completely agree with Jane where actually clients do a better job than we do anyway, in my opinion.

And so I think it’s vital that we do use technology. It’s key. It’s the only way we can drive this industry forward. I also think that once again, I agree with Jane, clients will expect you to use technology moving forward. I don’t think they’ll expect you to come and have a cup of coffee with them in their house and spend half an hour talking about the family before you get into it. I wouldn’t want that, you know, I wouldn’t want an adviser coming to me. So I think you’ll start to see people expecting that you use technology to do this because it’ll just be the way that they’re used to working. And just to touch on the open banking that will drive that forward as well, I think.

So MiFID’s new rule for doing suitability reviews is to assess product suitability on a yearly basis. And I don’t know how you can do that without using technology. So every year you have to assess a client’s circumstances, have they changed, are there any changes to risk, et cetera. And if an adviser has got a hundred clients are they planning on doing a hundred visits a year, going through all of that, assessing that, and moving back forward– you just have to use technology to do that.

Across our wealth managers, we’ve done over 70,000 online suitability reviews this year. And that’s with a client logging in, seeing their online fact-find, checking that the circumstances are still the same, then updating if it’s not the same, and then that’s when we then have to step in and assess, is there a change, does there need to be change to that suitability? You just can’t build a business at a scale without using technology to do that.

This isn’t just about fact-finds, it’s about technology supporting your business, improving efficiency, and reducing client costs. Advisers that don’t embrace technology don’t have a future.

Alan Easter:

I think what I’ve taken out of this conversation today and the pre-meeting chats we’ve had with Ray and Jamie is, that people shouldn’t really just be thinking that this is about digital fact-find. This is about technology and how technology can support improvements in your business.

So I’ll share with you some actual hard data, and it’s a firm I’ve been working with recently that had a totally unintegrated process. They had KYC and CRM, on one system, they had financial planning on another system. They had fee reconciliation on a different system. None of these systems worked with each other.

The ATR was a very manual process. So working with them to bring all of these things in that were integrated and then re-mapping processes. So process mapping for those of you that know me is my idea of hell, but actually when you come out the back of it, we remapped between 200 and 300 different processes in the adviser firm.

And the cost-saving was between 12 and 35%. So that’s purely by making sure the systems that they use were integrated and purely by making sure that the right people were doing the right job. So to go back to Ray’s point, if we get regulatory pressure over the next five to seven years, about how do we get our cost to the client down?

Our priority has to be maintaining margin by getting those costs down. The only way that I can see that that can happen is by investing in tech. So, Ray, I think Ian’s point is bang on those advisers that don’t embrace tech and don’t embrace digitalization don’t really have a future, and that’s not because they’re bad advisers.