A decade has passed since the financial crisis of 2008. During that time, the financial markets have made a full recovery. Stricter regulations have helped customers regain their trust in investment advisors, and demand for investment advice is once again on the rise. But things will never be the same as before. A recent report states that the central bank stimulus that has been largely responsible for driving the market performance is unsustainable, and market volatility will increase as interest rates rise. Financial advisory institutions and independent financial advisors (IFAs) have been focusing on goal-based financial planning rather than performance.
The improvement of technology and IFA software has helped facilitate compliance with ever-changing regulatory rules whilst delivering a seamless, multi-faceted advisory service to clients. It is even starting to revolutionise the way investment advice is being delivered, such as the introduction of Robo-advice.
Aimed at opening out the lower end of the advisory market, the service provides automated advice based on information a client inputs online, which costs significantly less than booking some face-to-face time with a qualified financial advisor. While it presents its own regulatory challenges, and risks of falling foul of misselling, some financial advisory firms are already offering Robo-advice, with some of the major institutions examining the potential of incorporating it into their range of services.
The human touch
Incorporating enhanced IFA software from Intelliflo and other, similar IFA software providers means the business will benefit from a suite of supporting software, covering everything from client online portals to back-office tasks, from client information management to cybersecurity protection, and everything in between.
But while advancing technology may automate more and more of a client's interactions with their financial advisor, it's unlikely to replace the need for a face-to-face consultation. Rather, financial advisory software can be designed to cater to the needs of customers at every level - whether it's to receive basic advice online or to provide an online method of scheduling a meeting for a full personal financial review.
Interesting times are ahead, for certain, at least in terms of the development of technologies to support the industry. A great deal may have changed by 2020 on the surface, but fundamentally, the role of the financial advisor will have changed very little.