“Traditional advisors could soon be replaced. Not by robo-advisors, investment apps or financial planning software; but by a new type of advisor – one who embraces these technologies to operate in a more modern, efficient, engaging way.”
The tipping point is here. For a host of reasons, mutual fund dealers across the continent are moving to the advice-first model.
But the logistical challenges are daunting. Without digital capabilities, managing the client experience – from prospect, to onboarding, to navigating the lifecycle of wealth management – is difficult. Particularly with ongoing changes in regulations!
Let’s discuss 7 things you’ll want to consider to help your dealers and advisors comply, adapt compete, and win.
1. Changes in regulation – are your systems up to the task?
Does your technology help you quickly adapt to the constantly changing regulatory environment? As legislators implement new regulations to keep up with market changes, best practices and guidelines can seem like a moving target for both MFDA and IIROC dealers and advisors.
If you’re managing with spreadsheets now, you’re falling behind. And if you’re using traditional email and scanning to send documents, your firm is exposed to security risk and liability.
2. Keeping up with compliance!
According to a Deloitte study:
“A strong compliance effort, rooted in a deep understanding of the regulations themselves, can potentially help organizations completely differentiate themselves.1”
You need automated solutions for client onboarding, as well as pre and post-sale regulatory and marketing communications.
Deloitte recommends that financial institutions strive to make compliance-related activity part of business as usual – “embedding these activities into the daily routine of their businesses.” Incorporating compliance into systems informs advisors, simplifies work, and improves overall compliance. An ounce of prevention is worth a pound of cure!
Technology needs to be intuitive and dynamic – able to support immediate, real-time postings, full account history, and accurate client information. Supported by this wealth of real-time knowledge, advisors can more easily and cost-effectively offer client-centric advice and risk-adjusted solutions.
3. Are your dealers getting the system support they expect?
“Institutions that resist digital innovation will be punished by customers, financial markets, and—sometimes—regulators.2”
Does your technology make it easy for dealers and advisors to stay close to clients and provide advice-first service? Not sure? Try these three questions.
- Is onboarding performed digitally end-to-end, including digital signatures and electronic verification?3
- Do your systems make client communication easy, and therefore frequent? Do they equip your advisors with a library of compliance-approved digital and hard-copy documents to use in business development?
- Can you automate the delivery, and track the viewing, of regulatory communications?
How did you do?
4. Are you attracting the new millennial wealth?
According to a Wealth Professional survey, more than 30% of Canadian financial advisors are over the age of 55.4
The typical established advisor has been in business for fourteen years – with a good chance they are not adept at social media.
Do you have tools to help your advisors understand and use social media? And digital tools to communicate and access information?
Can an advisor onboard a new client at the client’s convenience of location on a tablet? Can clients access their portfolio 24/7, online? Younger clients increasingly expect a high level of digital access and communication. Failing in this area cuts your advisors off from the new wealth … more so with every passing year.
5. Will you be able to adapt to new industry trends?
According to Insurance Journal,5 fee-based businesses – both discretionary and non-discretionary – have already outstripped transactional models as the main source of growth for fullservice brokers. The move is already impacting dealers.
Ask yourself, do you have flexible financial products that shift as trends do? Do you offer multiple investment funds and foreign currency products, or modeling and portfolio management tools? You need flexible products and tools to deliver the more customized, personalized service that clients increasingly expect.
Not to mention! Fee-based business requires new internal controls – is your firm ready? The MFDA announced they will be firms have “adequate internal controls to properly administer these accounts, accurately calculate fees, and ensure no doubledipping occurs.”6
6. Commit to the innovation transformation, every day
PWC’s report on banking illustrates that answering customer demand is critical to survival – more so with every passing day. PWC recommends focusing on technologies that meet customers’ shifting “wants and pain points,” plus reducing their own depen- dency on legacy systems – “despite the cost and complexity of doing so.”7
“It’s easy to hide behind legacy and archaic back-end systems. The reality is, it’s an opportunity. You either step up or step out.”
Rizwan Khalfan
Senior V.P. and Chief Digital Officer, at TD
7. Where to start?
If you’re an advisor, one possibility is to talk to your dealer/ supervisor about a digital onboarding system. It’s a great start to enabling the advice-first model. Another area you may want to discuss is digital marketing tools.
If you’re a dealer, an operational review can give you unprecedented insight. Such a review highlights gaps in operations, communications, and data management. Armed with these insights, you can narrow in on critical areas that are holding your advisors back from delivering advice-first in a seamless, client-centric manner.
Summary
New nimble systems change everything.
Clients feel more attended to. Advisors feel less burdened, more supported, more able to work on business development and client connection. Client service becomes more nuanced, more focused on wealth generation – and less on tiresome paperwork.
As every day goes by, clients and advisors expect and demand these simpler, better, less cumbersome systems.
The direction is clear. What’s holding you back?
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