This New Year, engage a tech expert, and kiss some stress goodbye

Fintech / Practice Management / Business Intelligence / 20 December 2017

David Haintz - This New Year, engage a tech expert, and kiss some stress goodbye
David Haintz - This New Year, engage a tech expert, and kiss some stress goodbye

The launch of the Financial Planning Association’s excellent fintech white paper at this year’s FPA Congress brought to the fore the need for advice business owners to understand the role of technology.

Working with businesses as they prepare themselves for growth, it becomes apparent that while many owners are aware of, and even informed about, the benefits of technology, most lack the time or expertise to capitalise. This is especially so for a typical advice business with a small team of, say, three to five, that outsources legal or accounting matters because its people don’t have specialist skills in these areas. (Yet another reason I see the rise of the professionally managed advice business.)

As with every major evolution in business, technology brings huge benefits but also substantial risks to focus, time and money.

It’s naïve to adopt a totally passive position on technology. Those who remain inert will be unable to deliver efficiently the service tomorrow’s customer will demand. They will lack the ability to scale to achieve profit and will ultimately fail.

Similarly, those who embrace every new piece of technology without careful consideration of how it serves the needs of their business, its alignment with their customer proposition, integration needs, and the capabilities of their team, risk burdening themselves with the very inefficiency they seek to avoid.

How to extract maximum value from existing technology is also an issue. As with many tools, most businesses aren’t aware how to get more from what they already have. Discussion of technology centres on the latest advice tools, extending occasionally to customer relationship management and workflow. These are all areas with great potential, but what about the more mundane tools, like email, document storage and websites? These also require careful consideration.

Those who know me know well that I am not a technology expert, far from it. But I do know it’s important to focus on one’s strengths, and to understand when it’s time to seek assistance from external experts. Among the hundreds of advisers and advice firms I talk to every year, I am seeing an inordinate amount of time being spent and wasted spinning wheels on technology matters. In many cases, no experts are involved; it’s the blind leading the blind.

As stated, for business owners it is common practice to work with experts for accounting, tax and legal advice, yet we fail to seek the same level of professional input when it comes to technology. Many of those operating under a licensee defer to that entity without consideration of their specific circumstances, while others do nothing at all.

It’s not from a lack of options. There are now ways to access practical and affordable expertise under subscription arrangements that blend general information with custom solutions. These arrangements create a virtual chief technology officer (CTO) capability that previously would’ve required hiring an expensive full-time resource. They also eliminate the need for initial capital expense and typically support the implementation of the advice given.

It’s important to remember that technology is the enabler of your business vision and client value proposition and not a replacement for them. Always ensure that anyone you engage for technology guidance seeks to understand what you’re looking to achieve and doesn’t simply propose easy answers for new tools because they seem good or have broad acceptance in the market. As with a good adviser, there should be a separation of professional advice from product sales.

You should expect the same level of discovery and strategy detail as you would provide a client seeking comprehensive financial advice. And you should require that your chosen provider puts your interests first.

Whilst far from perfect, Australia is still a leading market in many ways, despite the upcoming royal commission and the many reported advice scandals. That said, in this ever-growing global community we are part of, we must continue to look beyond our shores and take on information and leads from other markets. My experience is that whilst less complex, the US is well ahead of us in technology within advice businesses, and in separating advice tools from business tools.

I highly commend the FPA for making a start on identifying tech players within the advice industry. Practically, getting the full picture is like an enormous jigsaw puzzle for most. There must be a vision to start, and the pieces all need to fit together.

Perhaps a new year’s resolution for you is to consider outsourcing this complex and potentially time-consuming area of technology within the business; find yourself an external CTO and stick to what you do best.

David Haintz is the director of Global Adviser Alpha.

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