by Tony Vidler 
“Innovation” and “delivering financial advice” do not usually go together for the majority in the industry.___________________________________
Is this the highest professional aspiration for the hundreds of thousands of quality human beings working in financial services? Is that work worthy of them? I think not.
Will consumers continue to be content with bland, “run of the mill”, generic solutions that everyone else in the market offers? I think not.
The most interesting, challenging, demanding, lucrative and valuable clients an advice firm could have do not gravitate to that type of solution. They can get that sort of solution online, and a damned sight cheaper than going to see a professionally trained personal adviser.
To begin figuring out how to innovate in delivering financial advice as a commercial service we do have to ask the basic question of every aspect of our business:
“Why does it have to be this way?”
There are often reasons – such as regulations – that prescribe a certain thing must happen in a certain way. For instance; we have a rule which says advice must be delivered in writing, so delivering advice in a written format is “must”.
But to innovate we need to move beyond what is a “must” and figure out
“How would it work ideally?”
We might then come up with an answer such as “for our target market clients advice is not a “point in time plan which is redundant in 2 months time” – it is behavioural coaching that takes into account the rapidly changing circumstances of their life”.
That might mean that our “advice” is in snippets…small parcels of information and guidance that deal with with key decisions week to week, or month to month. High one-to-one contact and delivered verbally – advice on the fly as it were. Which then has to be captured in some written form to satisfy the regulators later…but that is not a requirement of the consumer, so it is largely irrelevant to them. But ensuring that the written advice is simply a digital record (even if that is just a screenshot of a whats app conversation) which they can access whenever they want might be the way we should do it.
Maybe.
I am not saying that example is the best or right way to go about it, but it is an example of a different way of thinking about HOW we might go about it – and that is what matters. We need to be thinking about how we might go about doing things differently and meeting the personal expectations of the clients we serve in preference to simply being seen as “safe practitioners” because we do everything the same way as everyone else in the business.
The first is about focussing upon the end-user – the client. What is it they want? How do they want things to work? What do they value? What wows them? What are their expectations? Basically…..what do they desire?
The second is more technical, or pragmatic, in focus. What is physically possible? Does the technology exist, or how can it be used? How could we use knowledge or technology if we were not restricted in how we married them up? How could we do faster, better, leaner, more personalised, more fun, more useful, more timely….more anything….what is actually feasible in todays world with what we know and what we have or can access?
The final question is the limiting one: can the fabulous concepts be done profitably? You might have a great and empowering idea that would attract every billionaire on the planet as a client of your firm…such as they get Warren Buffett personally managing their money and talking to them personally each week. But can you afford him? And still make a dollar for your own stakeholders? Or maybe you should just hologram yourself into a meeting virtually…..or hey! maybe we should hologram Warren Buffett in?
…but if that technology cost $3,000,000 to implement and the turnover of your firm is $500,000 per year, then maybe it is not a good innovation after all….or maybe it is a good innovation but the cost of the technology is just too steep right now. It is perhaps an idea for the future….
When re-thinking how your business could work, or how it could deliver the type of value that your ideal target market clients want, don’t let the final question regarding profitability stifle you. Good ideas can be good ideas whose time simply has not come yet – but don’t lose the good idea. The profitability question really serves as a checkpoint on which ideas to run with now.
To achieve breakthroughs in how a practice works, or perhaps redefine how an entire industry works, requires that we challenge all the basic assumptions to begin with. It is that challenging of the status quo, asking “why does it have to be this way”, which leads us into innovative thinking and potentially seeing the business future an entirely different way.
The business models for successful financial advice businesses will evolve rapidly in the next few years, and now is definitelky the time to do some serious thinking before we try and adapt.
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