Many financial advisers are still relying on paper-based systems, despite the demands of the retail distribution review (RDR), says financial services firm True Potential LLP.
Daniel Harrison, senior partner, has expressed his ‘surprise’ that some advisers are still ‘failing to embrace technology’, despite the imminent arrival of inspections from the FCA.
With the introduction of the RDR in December 2012 came the requirement for advisers to justify their adviser charging agreements by demonstrating that they are delivering their value proposition.
However, Harrison says he still sees many examples of advisers relying on outdated and cumbersome methods to do this, whilst others are yet to have any sort of system at all.
“The FCA has been quite clear that they want to see advisers sit down with their clients, present a proposition and then agree a charging mechanism,” says Harrison.
He added: “What some advisers have missed though, is that the FCA has said that they will check that clients are getting exactly what has been agreed and that the firm is monitoring this and acting where needed. This changes the dynamic quite drastically from what it was last year, where it was very much left up to ‘trust’ to justify ongoing charges.”
Harrison therefore believes that advisers need to adopt a technology process that helps them place their propositions and how they work with their clients at the centre of their business.
“Advisers that are failing to embrace technology are going to be left behind. The increasing demands placed upon advisers as a result of the RDR has led to an even greater need for technology to manage the advice process,” says Harrison.
He continued: “Post-RDR, investors are looking for more value from their adviser and only those with the right technology will be best placed to provide this. In today’s society, people want to be able to access their financial information on the go, at a time that is convenient for them. The best platforms allow investors to view their investments and review their performance in a way that fits their lifestyle, using a tablet or laptop computer.
“This isn’t a case of technology for technology’s sake either, or of technology replacing the valuable advice process – it’s about meeting client demand in an attractive, always-on manner. Those who think their clients don’t want this information will be left behind in the market place.
“If advisers continue to ignore the benefits that technology brings – including improved customer experience and streamlined processes to help them submit business compliantly – this will only exacerbate the current adviser gap in the UK as more advisers fail to compete for business and cannot demonstrate enough client value to justify their charges.”