Financial technology, known as Fintech, has provided clients with a range of online financial tools. Indeed, some commentators have seen Fintech as the end of personalised financial advice. They see a future where consumers will manage their own financial futures through “robo advisers”.
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However, as the Economist has pointed out, you need a bank account to use Fintech, and software companies are not keen to take on all the regulatory paraphernalia of running bank accounts. This means there is a practical and regulatory boundary to what Fintech can do. Software companies don’t want to cross that line into becoming banks or taking responsibility for investment advice, so what is now emerging is an integrated advice model wherein financial advisers are teaching clients how to use tools to engage with financial planning.
Working with clients to help them use the tools
Often, clients are not looking to replace paid services with free online advice. They value the relationship they have with their financial advisor and trust the advice they are getting. After all, if they didn’t want advice, they wouldn’t have approached the advisor in the first place. Most Fintech does a fairly simple job of allowing a client to see all their accounts and investments in one place, acting as a front-end viewer to the plans and investments that the advisor has drawn up with the client and are often held in back office systems for financial advisers.
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Fintech firms assume clients love forms
There are many clients who visit a financial adviser precisely because they loathe filling in forms and having to read the reams of information that accompany any financial decision. They want to tell someone what their situation is and what they want to achieve and have them deal with all of the details. These people are not going to suddenly take a different view because the form is online.
Many people spend their working lives sitting at computers. They don’t want to spend their evenings doing the same thing. They’re quite happy for Back office systems for financial advisers to store their details. They just don’t want to have to do the work themselves.
As long as people continue to have this attitude, there will be a need for human financial advisors.