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7 Questions to Deliver Advice Transformation


John Wilkinson, part of the WBMS network, speaks about Advice Transformation for Business:

Having spent two years designing, creating and developing digital advice models I have spent the last couple of months speaking to business leaders of traditional advice models about how to transform their businesses into a more digitised model.

The drivers for this are clear

  • Advisory businesses are becoming less profitable. According to FCA data whilst revenues from retail advisory businesses in 2016 increased 9% YOY, profits fell 9%. The drivers for this are not only regulatory (PII costs, FSCS levy, MiFID II and GDPR compliance to name but a few) but also increasing adviser scarcity which is pushing up costs (average total earnings for advisers reached £93,100 in 2017 – up from £81,500 in 2016 according to recruitment firm BWD). The solution is clear, make advisers and paraplanners more productive.
  • Digital models, executed excellently, can not only deliver better productivity but can also deliver a better customer experience and enable the firm to manage risk better

Typically, the customer journey (often not properly mapped) is fraught with challenge

  • It is adviser dominated i.e. high use of the most expensive resource
  • Manual processes & calculations e.g. for paraplanners
  • Systems not integrated with a reliance on re keying
  • Advice software, when deployed, not fully utilised
  • And, critically, firms unaware of the willingness of customers to support a digital journey where they take the lead at some stages in terms of effort
To move your traditional business forward start by asking some simple questions
1) Do you have relevant customer insight?
  • The CEO of one Wealth Management firm told me their insight revealed that 40% of their customers would prefer to complete the fact find themselves. Add to that the customers that would be prepared to and you have a business case for a digital front end and/or customer portal
  • Evidence from an advice software provider suggests that where customers fill out the fact find themselves the data is more accurate and granular (apologies to any advisers but your added value comes from reviewing this data and giving advice, not from collecting ‘stuff’)
2) How willing are your customers to undertake a more digital journey?
  • Have you assumed that they won’t because of their age (the average age of an investor in my main banking experience was 59, the highest for a wealth firm I have discovered so far is 74 creating a retention issue due to mortality)?
  • In a recent global survey 36% of those over 65 said they would consider robo advice provided it was accompanied by human support
  • Best to test with your customers which parts of the journey – fact find, risk profile, document management, appointment booking etc – they would be prepared to or indeed prefer to undertake digitally
3) Have you mapped your ’as is’ customer journey?
  • If you do the issues will be clear. One recently appointed COO simply said “John, everything is broken”. To start a journey, we need to know where we are now.
4) Do you know your ‘to be’ Target Operating Model (TOM)?
  • Have you mapped the end state (or states for multiple customer segments)? Have you determined the phased transformation to get there as trying to do everything at once will bring its own problems?
5) Do you know the best of breed technologies to support the TOM?
  • Don’t try build specialist elements yourself. The proprietors of such technologies will constantly innovate them for you as part of their BAU
  • Adopt not adapt these technologies and utilise their capabilities to the full
  • Run ‘best in class’ RFP processes to select them including prototyping, vendor evidence workshops and model office insights
  • Integrate these technologies using APIs and configure the workflows to maximise efficiency and improve the customer journey
6) Do you know the full capability of the technology to replace current manual processes?
  • One advice software provider has 24 calculators and models. For pension planning they can automate net contribution, lifetime allowance and carry forward calculations as well as modelling pension income at retirement to help with annuity v drawdown choices
  • Recent work I was involved in looked at the ability to automate the suitability letter but present it to the adviser for discussion with the client
  • Are you aware of the trends in digital advice to ensure your TOM is future proof? Pioneering work is underway to develop and deploy automated paraplanners including, recently, DB transfer robo paraplanners
7) And, finally, do you have the right leadership skills for this transformation?
  • Collaboration – Leading a TOM team, you can expect to be working with IT, HR, Operations, Advice Leadership, Risk & Controls & Compliance to name but a few
  • Gravitas and clarity in high level communications – To be able to put complex topics such as a programme plan, an RFP process or a Target Operating Model ‘on a page’ to ensure good executive stakeholder engagement
  • Assertiveness – A willingness at times to challenge stakeholders to deliver the best outcomes for the programme in the shortest realistic timeline
  • Drive and energy – Delivering digital advice programmes can be a gruelling task, but the benefits of successful implementation for a business are extremely valuable
  • SME expertise – To steer the programme in the right direction
  • Programme management expertise – To drive programme delivery

Article written by John Wilkinson

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