Ignore technology at your business' risk

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Being ahead of the technological trends will help advisers stay relevant with their businesses, says Stuart Auld, head of sales for New Zealand at Morningstar.

Thursday, August 28th 2014, 6:00AM 2 Comments

by Susan Edmunds

He is speaking at next month’s Meet the Managers event, about utilising technology to enhance performance.

He said it was likely that key trends in the use of technology would have an increasing impact on adviser businesses. Many advisers were not prepared for the changes that would happen over the next five or 10 years, he said.

One of the biggest trends internationally was the use of roboadvisers, he said. These range from online offers that match clients with products by relying on algorithms with no advice offered, to advisers using technology to complement their business and established providers offering an online tool to customers.

“I’ve been on some of these sites and had a look and some are quite impressive in what they can offer.”

He said, if the FMA gave its seal of approval to roboadvice offers, it could take off in New Zealand. “The average 20 – or 25-year-old isn’t in the market to do the same things as people my age. Where will they get their financial advice?”

Ninety per cent of the multimillionaires Twitter’s IPO created among its staff turned to roboadvice, he said.

“If the FMA turned around and said okay, it could happen here. If someone had a parent or a relationship in Australia and built the technology there to bring to New Zealand with New Zealand products underlying it could happen.”

Advice businesses could be helped by hiring younger advisers, he said.

“A 30-year-old adviser has a different view of technology, social media, using the cloud… A big thing is getting involved with social media. Peer endorsement is happening through social media, not through the brand. ANZ or AMP means nothing to younger people these days, they have a different way of looking for a financial adviser.”

The average age of an adviser was reflected in the average age of their client base, he said. “Employing young advisers makes a big difference to the client base make-up.”

Technology to streamline a business would help in the event of a sale, too. “The feedback is a lot of advisers don’t want to buy a business with 1000 paper files. The idea of holding client files in a complicated way gets in the way of fine-tuning the business for sale.”

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