Once the plan is in place, the firm looks at which investments are best, reviewing fund managers, platforms and selecting the appropriate ones for the client.
“In terms of AdviceBridge as a hybrid – this is in reference to an automated system but with human interaction, basically being able to implement a real financial planning process through technology whilst keeping the human (adviser) as an interface with the client,” he said.
“What this means is being able to digitise the manual, time-consuming tasks, cutting out a lot of the human administration and research, gathering information, analysing client’s current holdings/portfolios, before recommending the right structure (wrappers, investments, platforms) and then producing a recommendation report that’s ready to present to the client.”
Ely-Johnston claimed AdviceBridge was one of the only systems offering this degree of automation and that it made financial planning more affordable for mass affluent clients, helping advisers become more profitable through the automation of processes for existing clients and through providing a new revenue stream from prospective ones.
Closing the advice gap
Ely-Johnston also said there are two elements as to how this can help close the advice gap.
Firstly, he referred to the actual cost as he said the typical cost of advice to a new client was £1500 and the cost of providing that advice was roughly 2/3rds of that, for example £1000 leaving a profit below £500.
“With the time spent on new clients being cut down significantly when adopting AdviceBridge this reduces the cost to under £500 and doubles the profit to over £1000. So where advisers found it unprofitable or barely worth the effort for such low returns would be where they drew the line i.e. had a minimum charging structure which hence creates a barrier to advice.
“If we assume this line is £100,000 in savings then this can theoretically be halved to £50,000 hence helping with those in the advice gap.”
The second part of how it helps is in the system's ability to provide an understanding of the benefits to the individual.
"A lot of prospective clients are put off by what they see as expensive costs for example the £1500 advice," he said.
“Typically, they approach an advisory firm to make an enquiry and one of the first things they will be informed of is the cost. There is no reference to the value at this stage as the adviser is unable to make this assessment and hence a large number of people walk away.”
He explained that the AdviceBridge system engages potential clients from the start, playing back to them what their financial situation is in a simple to understand format and displaying their potential savings from a tax and fees perspective.
