In recent years, the shift to digital-first advisory models has gained momentum enabling IFAs (Independent Financial Advisors) to conduct more business through investment managers and platforms.
A piece of research recently conducted in the UK predicts that, in the next 12 months, more than 50% of IFAs will increase their business to third parties, more than 70% will digitally access their investment platforms daily and the vast majority will differentiate their business by using multiple partners.
The key to become the platform of choice for IFAs is to transform the business by introducing a set of digital services and offering a complete set of investment services to IFAs, from full SIPPs and complex pension investment options, to boutique discretionary investment management services and Investment Trusts, etc.
Onboardings and client reporting should be paperless, including digitally signed proposals and contracts. If the entire process is paper-based, with slow, complex and error prone onboarding, customers start to lose business in favour of other more modern and digital ready providers.
The optimal solution to implement could follow an incremental and agile approach to digital transformation, providing initially a minimum viable solution followed by incremental sets of features and releases:
- 24×7 IFA digital portal for investment solutions simulation, sale, insights, accessing their book of business, anytime and anywhere from any device, reporting and monitoring to increase market penetration integrated with legacy back-office.
- Digital paperless client onboarding and mandate set-up solution including post-onboarding client management and servicing features like suitability reviews, suitability monitoring, client communications management.
- Digital client engagement portal and apps empowering clients to access and manage investment information anytime and anywhere in collaboration with the IFA for secure messaging, documents sharing, digital signature of proposals and contracts amendments.
Next steps could be incremental releases to fully digitise all client lifecycle management processes, to increase profitability by reducing operational costs.
Thanks to a comprehensive digital transformation programme, it could be possible to gain a competitive advantage against peers in the IFA market arena, demonstrated by strong growth of IFA introduced business and net inflows.
Moreover, the IFA’s TCO (total cost of ownership) could be reduced by increasing advisor productivity, boosting digital client penetration by attracting digital savvy investors and increasing the IFA’s NPS (Net Promoter Score) by generating leads through referral marketing.
The brand could therefore be repositioned as a digitally enabled advice driven business, ready to face future competition today.