As the UK edges out of its third (and hopefully final) national lockdown, the resumption of many social activities we’ve been starved of for many, many months is being warmly welcomed. Employees are gradually filtering back into offices, pubs and restaurants have reopened indoors – we can even indulge in some ‘cautious cuddling’ without fear of breaking the law.
But while there’s an understandable desire for things to get back to normal as soon as reasonably possible, and by “normal” we mean a return to pre-pandemic ways of living, it is widely accepted that this will be a “new normal”.
For advice businesses, there is already plenty to indicate what some aspects of this “new normal” will look like. Although some employees will continue working remotely, a hybrid seems the preferred solution, combining the flexibility of working from home with the social interaction gained within an office. We are also likely to see the phasing out of travelling long distances to attend client meetings, with it more commercially prudent for firms to interact with their customers through video technology and client portals.
Underpinning many changes to the post-Covid ways of living and working is technology, with recent research by NextWealth entitled ‘Platforms within the UK’ showing that tech firms have really upped their game over the past 12 months or so. Advisers were asked to score five pieces of kit – platforms, cashflow modelling, back-office systems, risk profilers, and client portals – against four criteria: willingness to recommend, the support provided, value for money, integration with other tech.
To draw a brief conclusion, the results offered real encouragement. Most notably, platforms, cashflow modellers and client portals saw scores improve across all four metrics.
Even one of the industry’s biggest challenges, integrations, saw some progress. As one of our recent blogs highlighted, getting the various pieces of technology involved in the advice process to talk to one another continues to prove a headache for advisers. When asked about the current state of play, advisers felt platforms, back-office systems, client portals and cashflow modelling were all integrating better than they were at the start of the pandemic, with only risk profiling tools slipping in this area. And while the report stopped way short of suggesting the problem is solved, any progress marks a step in the right direction.
During the pandemic, the improvement to digital submission processes has been one of the standout developments – few platforms experienced any real disruption to client servicing. This was underlined within the NextWealth report, which found the number of platforms accepting eSignatures rose from nine to 17 out of 20 between March 2020 and March 2021. Although the shift towards a paperless client journey has been in train for some time, Covid accelerated the adoption of digital processes. Wet signatures are not conducive to client onboarding with social distancing measures in place.
But before platforms give themselves a hearty slap on the back, we’re concerned some data may not be telling the full story. For example, the report suggests some firms require a form – whether scanned or with a wet signature – on fewer than 10% of processes, meaning there’s no requirement to see sight of certain documents, including legal ones. This seems questionable. It’s unclear how platforms are auditing that firms are following their processes and controls – for those claiming to be fully digital with no electronic signatures, does this really include items such as marriage certificates? It’s equally unclear how any regular due diligence on the firms in relation to Know Your Customer and anti-money laundering requirements is being performed. There is a sense that platforms might be marking their own homework.
The main drawback here is that while advisers aren’t carrying the full load, the onus is put on them to check. Any increases to admin duties may eat into time advisers spend doing the bits that clients value. Platforms can and should be doing more to ‘create’ time, by doing the heavy lifting on such admin. The main benefit of having a fully digitised client onboarding journey is the efficiency it brings. As noted earlier, with many advisers likely to continue conducting some client meetings remotely, it’s important the time saved on travel isn’t soaked up by other non-value-add activities. The focus here should be about reducing the time it takes to transact businesses rather than shrinking the number of forms needing to be filled in.
As we head into the “new normal” we must ensure that the digital processes we put in place are actually helping advisers. The less time advisers spend doing admin the more time they can spend helping their clients work towards their financial objectives and growing their business.