A background of green foliage

Blending Tech & Humanity

By Casey Mills

What is the Future of Financial Advice?

Since the completion of the Retail Distribution Review (RDR) almost 7 years ago a lot has changed in the financial services industry, for both advisers and clients.  These changes seem to have resulted in a more professional approach to financial advice.

But where positive changes are possible, this is only the tip of the iceberg. A recent client meeting with a couple we have been working with over the past few years triggered some clear thoughts about our service in terms of what has actually changed? and what does the future hold?

This couple had sold all their investment portfolio during the credit crisis and remained in cash for 8 years after this awful experience. During this meeting we discussed his plan to stop working fully in the new year and everything that is involved in making this huge life decision. Where the main challenges exist between our ears and are not about money.

The couple told me they now feel more confident about their finances, they have stopped looking at valuations all the time, and they are now entirely comfortable around money and are hugely excited about the future in retirement

As a 40-something financial planner looking forward to the next 20 plus years in this profession, my clients’ words really resonated with me. The reason for their mindset is because of their trust in our relationship.

Now, this does not mean that they have not taken huge value from the work we have done over the past few years. But from their perspective, it all has come down to the human feeling that is derived from a trusted relationship, something you might experience with a close friend or a work colleague.

I fully appreciate this isn’t a ground-breaking observation and that for many years “people buy people” has been the mantra of the financial advice industry. However, this conversation did reconfirm to me the importance of the human connection and ongoing interaction – without sacrificing the innovation of technology.

This made me think: how do we maintain and continue to foster the human element of financial planning against a backdrop of ever quickening advancement in technology?

Based on the way things have been going, I believe there will be a time when most people will have a lifetime financial forecast a financial plan, probably via mobile app. As it stands, financial planning services are not economical or desired for all. Many people are probably unaware that such a service exists, although there seems to be a plethora of financial advisers using the term ‘financial planner’ and an increasing use of cashflow modelling. A truly holistic Financial Planning service isn’t being delivered to all.

So, what is the future of financial planning

I believe technology will take an increasing role in helping people understand their money, plan for the future and stay on track to achieve their financial life goals. But an increase in technology means we come full circle back to the question of what can we as humans offer? This is where Financial Planners need to invest our time and energy. Improving our ability to interact with clients through active listening, coaching, understanding behaviour, biases, asking great questions, life planning and more.

As the progression of technology further commoditises the core elements of financial advice and financial planning, human interaction alongside this new technology will be the real differentiator.

From a personal perspective, sometimes you just need a reset to re-focus on those things that have always been fundamental to our role. Financial advice has always been about people and the relationships that are forged between client and adviser. We shouldn’t allow external distractions; social, economic, technological or regulatory dilute those life changing trusted relationships.

So, the future of financial advice is financial planning that must make the best use possible of technology but without losing sight of our most valuable commodity, the human relationship.

Casey Mills headshot
Courtesy of Casey Mills

Casey has worked in financial services since 2001; he established TFP Financial Planning Ltd in 2015 alongside Ian Jones. Read his full bio here.

The views expressed in this article are that of this author and do not necessarily reflect the views and opinions of Voyant.