In a recent poll which asked what clients really value from their financial advisers, one of the leading answers, by some distance, was relationship management. Navra believes that in almost all cases the administrative work to onboard and service a client is what takes up the bulk of an adviser’s time.
This is because many advisers (especially in the UK) still operate paper-based review and implementation processes.
“The job of the adviser is absolutely the relationship with clients, delivering a good and efficient service. Unfortunately the administrative and compliance burden is a long process of ensuring that suitable advice is delivered in a coherent and transparent way, all the application forms and AML requirements are collated, photocopied, stored online, and then sent to the platforms and fund providers, who in turn have to manually input everything into their systems,” he says.
The problem with such a process, says Navra, is that not only is it time consuming, it can lead to unintentional human errors, which he says a digital process would remove.
“The major benefit with going digital is what I call the ‘input once, input nonce’ concept,” he says. “This basically means you only ever input something once, to the point where the data transfers from the investor to the adviser, to the back office, and then to the providers, without there being a need for humans to re-enter the same data twice. This also lowers the risk of mistakes.”
Navra says the end result would be the delivery of a much better experience for everyone involved, namely the investor, the adviser and the provider.
“At Praemium our argument is that time is the new currency,” he says. “If advisers have more time, they can spend it with their clients, delivering the service that matters whilst lowering their costs. Less manual work with fewer mistakes means less time spent implementing and correcting those mistakes.
“We know that in both the advice and platform market there is a squeeze on fees, and if we are going to lower fees we have to lower our costs. The way to lower all of our administrative costs is to be digital and paperless.”
Navra also mentioned going digital is positive from a compliance perspective.
“In a digital workflow you are ensuring the work is done in a very specific way, which ensures people don’t accidentally do the wrong thing,” he says. “No one goes out of their way to do the wrong thing, but when you are doing it digitally you are following a process which is accepted and validated from a compliance viewpoint.
“In addition to delivering a good experience for advisers, administrators and clients, you are creating a strong audit trail to demonstrate that you are doing your job properly in repeatable way. You are also preventing data entry mistakes that could cause delays and financial risk.”
With this in mind, Navra says much of what Praemium International aims to deliver in 2019 is a fully paperless process, from the first engagement of a prospect, all the way through to the digital opening of accounts on its platform. This, he adds, could be in the form of digital fact-finds, the online storage and sharing of documents and the pre-population of forms, plus much more.
“The idea of living in a digital world is one which strongly resonates within our industry,” he says. “The amount of administrative paperwork that goes into engaging with clients is consistently one of the top bugbears for advisers across the globe, so we are working at providing ways to carry out the whole process in a more effective and progressive way.”