Jason Green: The technology shift in pensions advice

In a post-RDR world, it is the advice that is the product, not the savings or investment vehicle and, writes Jason Green, this has transformed how technology complements advice

Advice as we know it is changing. The introduction of automated advice solutions and subsequent rise of technology have changed the way in which consumers are saving and engaging with financial institutions.

There have been many drivers for change in recent years. Pension freedom has driven unparalleled demand for advice and opened access to a vast number of maturing pensions savings. GDPR and open banking are meanwhile driving institutions to deliver better customer data in more consumer-focused ways.

The demand for financial advice sustainably exceeds supply. Many more customers want advice but not at the current price point. It appears the pension dashboards project as we know it may no longer include advisers. This leaves the door open for other organisations to introduce their own technology solutions.

Over the last five years, the adviser software landscape has changed substantially with acquisitions and new systems entering the market. Focus’s Now:Advise, Time4Advice and Salesforce FS Cloud are all significant arrivals. And only this month Invesco purchased Intelliflo.

Open banking and personal finance tools, such as those available from Intelliflo and True Potential, provide advisers access to far more client data. This allows advisers to update processes like factfinding. Aon with Bigblue and Mercer with Harmonise are making this work very well in the workplace market.

Screensharing technology and virtual meetings software such as Skype4Business, CallCabinet and SaleMove have all come on vastly and an increasing number of firms are using such services with at least some clients.

An adviser technology study by Investment News in the US last year identified that 83% of American advisers use video conferencing as part of their internal or client communications. Another study demonstrated many clients in the 50 to 70 age band are actually more comfortable with virtual meetings than face-to-face. More regularly, shorter interactive meetings seems to be an emerging theme.

Micro-savings have also seen a rise in adoption in the last year – giving savers the ability to save smaller non-fixed amounts, which is a break from traditional savings habits, is giving consumers more control and power.

Streamline working practices

A vast range of services can now help streamline adviser working practices. These include advised and non-advised investment platforms, Open Banking APIs (application programming interfaces), consolidation services, debt management and financial planning and budgeting tools.

The rise of financial and cashflow planning software is another growing theme. Key players in this field include CashCalc, Voyant and the IRESS offer software, which can help advisers to analyse client goals and identify tax implications on different investment strategies, along with assisting in more frequent reviewing of assets and portfolios.

In a post-RDR world, it is the advice that is the product, not the savings or investment vehicle, and this has transformed how technology complements advice. Platforms and life offices need to understand the impact of these changes if they are to remain valuable business partners.

Furthermore, any advice firm not embracing technology is missing the chance to spend more time doing what most advisers prefer to do – giving advice.

Jason Green is head of workplace research at Finance and Technology Research Centre