Access to quality personal financial planning is undergoing a transformation. In the past, the cost of provision was necessarily high.
Advice was a face-to-face business, with every client requiring in-person meetings and the accompanying travel time. Information gathering was a laborious manual process for both client and adviser.
As a result, working with an adviser was the preserve of the few: those who could afford it, understood its value and were prepared to pay for it.
Today, those barriers are tumbling away. The regulator is pushing at them with the advice guidance boundary review, paving the way for a much greater proportion of consumers to be supported with their financial decisions.
And technology is powering the shift. The majority of firms use video calling for some or all of their meetings. App technology and automation are taking the work out of collecting information, communicating with clients and providers, and more.
As a result, advice is becoming cheaper and more efficient to deliver. And it looks set to become available to a much wider range of people. The opportunity for advice firms is huge. But seizing it successfully will bring a new challenge: demonstrating your value to a new potential client base.
In the pub the other night, a friend told me he didn’t need a financial adviser. He was doing very nicely investing for himself, thank you very much.
At my desk the next day, looking at the performance of our indices, I thought, ‘I bet you are’. Markets are up, everything’s up. Bitcoin’s flying high again. It’s the kind of environment in which it’s easy for people to convince themselves they’ve got the Midas touch.
It’s also exactly the kind of environment in which the right advice can really count. We all know the risks of overconfidence, of anchoring on one idea or belief – ‘the market’s been going up for weeks so it’ll go up again today!’ – of putting all your eggs in one basket.
Steering clients away from these pitfalls is just one of the invaluable roles played by a financial adviser, but people aren’t always aware they need help until they’ve made the costly mistake.
As a society, we are also used to doing much more for ourselves than people did in the past. Facilitated by technology, we plan our own travel, sell our own houses, buy our own insurance. Why would we buck the trend and get an expert in to help with our finances?
Of course, as well as the unconvinced, there are the fully persuaded; those who know they need help with their finances and will welcome the chance to get it.
