Technology is impacting every facet of the wealth market, improving areas from communication to client experience.
But one area enhanced by tech has gone relatively unnoticed.
The back office may not be the sexy side of the IFA world, but the admin needs to be done and over the last few years solutions have been created to ease the regulatory burden on the financial adviser.
Daniel Semal, head of technology strategy and architecture at BNY Mellon Pershing, said to International Adviser: “The front office is traditionally where wealth managers focus their attention when it comes to technology.
“However, the back office should not be overlooked and can have equal impact on a business’ success, with operational efficiency a key factor in delivering client outcomes.
“Solutions are constantly being brought to market targeting specific back office functions.”
Offering
There are many areas where back office tech can be utilised.
James Pearcy-Caldwell, head of the OpesFidelio network, told IA: “A comprehensive and client engaging portal makes the on-boarding of clients for advisers, a transparent and fast process.
“Enhanced customer service is a given, and all communications between the clients and advisers are integral and secure.
“Ideally, the system would be a multi-currency, cross border, innovative system to assist both clients and advisers.”
Cooper Abbott, president and chairman of Carillon Tower Advisers, said to IA: “We’re seeing increasingly sophisticated software to handle client relationship management, client data aggregation, portfolio rebalancing, cyber security, asset allocation modelling, and reporting.
“We’ve heard from advisers that these tools free up time, allowing them to focus on the aspects of wealth management that add the greatest value, such as discussing clients’ personal investing needs and goals, customising and updating financial plans, developing strong adviser-client relationships, and helping clients feel confident about their finances.”
Service benefits
Unlike blockchain, the technology is ready for financial advisers to use, but just what benefits can firms get with this tech in terms of their offering?
“There has been steady increase in the amount and detail of information that is required to be given to clients throughout the advice process and beyond,” Nathan Prior, partner and head of international at UK-based Partners Wealth Management, said to IA.
“Whilst wealth management firms with integrated product/investments might be able to use or update existing systems to gather this information, independent advisers utilising multiple products and investment providers for the benefits of their clients are left to compile information manually.
“To avoid advisers ‘dumbing down’ their recommendations to avoid such admin complexity, there is need for some standardised industry data formats which will enable the easy transmission of information into back offices.”
Alastair Black, head of wrap proposition at Standard Life, told IA: “Thanks to the automation of data capture, the process of providing regulated financial advice is becoming far more streamlined – improving efficiency, accuracy and security for all.”
Nick Eatock, executive chairman at Intelliflo, also said to IA that back office automation tech has reduced the “instances of data error, simply by drastically decreasing the chance for human error to creep in”.
Operation dependent
But, sometimes back office technology is not helpful for an adviser and bringing it in can be a disaster.
“In an efficient advice market, you would therefore hope that they would spend their time on the tasks that they are good at and the things that the paying client values,” Chris Jones, proposition director at service provider Dynamic Planner told IA.
“We hear frustrations from advisers that this is not always the case. Rather than software saving their time and being user friendly, it’s actually a chore that they have to outsource to an administrator. This sounds counterproductive.
“Sometimes the same information or task has to be duplicated or repeated. Sometimes software doesn’t represent what the adviser actually does or did which requires extra ‘work around’.
“And sometimes the software output isn’t intelligible for the actual client – let alone clear, fair and not misleading.
“It shouldn’t be this way and can be avoided by using modern technology and API (application programme interface) to process data efficiently, minimise input, maximise the existing data, support the adviser’s way of working and portray the relevant information in a way the client can understand and value.
“Embracing the modern regulatory framework actually makes this easier.”
It is, therefore, incumbant on advice firms to ensure that the back office systems they bring in are not only suitable and effective – but, most importantly, are not counterproductive and leave advisers with even more work to do.
