Advisers see fintech as tool not threat

Are financial advisers finally seeing fintech as an opportunity rather than a threat? New global research from the Financial Planning Standards Board (FPSB) suggests that advisers are beginning to embrace the benefits of automated financial tools.

This article was originally published on Financial Standard.

Author: Kerrie Sydee

Publication: Financial Standard

More financial advisers are embracing fintech as a tool to enhance services rather than seeing it as threat to their livelihood.

The new report from the Financial Planning Standards Board (FPSB) aims to start a global conversation around the implications of fintech and automated advice for the delivery of holistic, client-centric financial planning advice.

The report was developed from about 1700 survey responses from CFP professionals in 29 territories around the world and from FPSB member organisations in 26 territories.

The report highlighted the shift in sentiment towards automated advice tools, with a growing number of advisers stating they are less concerned about the disruptive potential of fully automated advice and instead believe it will complement their business.

Advisers ranked increased efficiency as the greatest benefit of fintech, citing the ability for fintech to automate back office and administration, speed up client reporting and provide real time information.

Advisers highlighted the role of fintech in removing bias, conflicts and emotions from their recommendations, noting that fintech has the ability to take emotion out of the decision making process for both the adviser and the client and can do a better job of providing impartial recommendations that best suits the client’s needs.

Advisers also noted the role fintech can play in creating more empowered and financially literate clients. The report found that advisers see fintech promoting a more collaborative engagement with clients and allowing for the engagement to be client driven rather than adviser driven.

While advisers expect fintech tools and artificial intelligence tools to continue to provide increasing value to their practices, they maintain that human financial advisers will still be needed to engage clients, manage emotions and ensure the delivery of holistic advice.

The report highlighted that advisers must continue to prove their worth to clients and the value traditional advice and fintech can play in maintaining client portfolios.

“Advisers and financial planning professional bodies need to spell out clearly the value of financial advisers, and accurately inform clients that fintech is like a ship – you still need a seasoned pilot to navigate through the ups and downs of life and choppy seas.”