November 2, 2022

Enhancing the Client Experience #5 – Greg Hansen – Transcript

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Enhancing the Client Experience

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Fraser Jack 

Thanks for joining me, Greg Hansen.

 

Greg Hansen 

Thanks, Fraser, pleasure to be here.

 

Fraser Jack 

Fantastic to have you along. And we’re talking all things client experience, we’re talking about data, we’re talking about technology, many of which are my favorite things. Before we get into that conversation, let’s let’s start with you tell us a little bit about yourself and what you’re doing at the moment.

 

Greg Hansen 

I’ve been around advice for a very long time, I’ve worked for product manufacturers and platforms, I’ve worked in licensees and national management roles, I’ve run business consultancy, I had a crack at a startup, looking at providing advice to people retiring without much money, which is a lot of fun. Now looking for help 24. And looking specifically at how we can help advisors, talk to more clients, provide advice more efficiently, and really looking at all those things that help advisors provide more advice to more people?

 

Fraser Jack 

Well, you’ve been everywhere, man. It’s been good.

 

Greg Hansen 

I’ve been around a long time.

 

Fraser Jack 

Oh, and you’re the perfect person to talk to about this, because you’ve seen it from like you said, it’s a small startup point of view from the technology piece from the from the consulting the advice piece, having those conversations that we’re talking about client experience, we’re talking about technology. Tell us about your thoughts on how important that that client experiences and in the developing of sort of a long term advice relationship?

 

Greg Hansen 

Yeah, it looks like there’s a lot of focus on technology. But the real focus needs to be I think, on the the client experience in the relationship the adviser has with the client, we’re very passionate about the value that advice has, and the value that it brings to people in having that advice relationship. We can talk about technology in different ways it can add to the client experience, but at the heart of it needs to be supporting the adviser to help them help the client articulate their goals, and deliver a plan to meet those goals and then monitor that plan in an ongoing sense. So from the role of technology, I think, is to support that, how do we make that more efficient? How do we help advisors have more of those face to face conversations? And how do we support them, increase their capacity, increase their ability to add value to more people and chatting to an adviser the other day about the value that he adds to to clients? I think his perspective was his mind value is to help them avoid doing dumb things. So

 

Fraser Jack 

yeah, there’s there’s definitely a tangible and intangible value of advisors in there. And we, you know, we always like to put the tangible values down, but often we’d like to lean into I think, you know, the clients feel a bit more like they’re getting that intangible value.

 

Greg Hansen 

Yes, definitely. So I think technology is an incredibly, incredibly important part to play. But I think the real role of it is to support that advisor conversation. Yep.

 

Fraser Jack 

Yeah, fantastic. Now, if we, if we get into a little bit of the technology and talking about the client experience and how this has happened in the past, let’s, let’s open up some of that, that little can of worms and talk about how you know where this journey has come from. Because I think, you know, we’ve all gone from using paper files and paper based, you know, information and unstructured data. And we’ll get into more of that unstructured conversation later. But unstructured information. And then we tried to overlay this technology and sort of talk to us about what you where you see that journey has come from,

 

Greg Hansen 

I think a great example of where they just come from his platforms go back many, many years. And I’ve been around the industry for many, many years. And people used to fill out paper application forms and have a variety of people calling calling fund managers fee for unit prices in and holdings and the like and assembling everything themselves. Platform is a great example of something that came along to make the whole process more efficient to, as I said, enable the advisors to spend more time face to face with clients and deal having those conversations that are really important. But it’s also interesting to me that different tools pop up all the time, and that some of these tools have great value and are useful for advisors and useful for clients. But over time, there’s a proliferation of these tools. And they tend to add complexity to an advice practice. Because there’s no one single source of truth. And say if we add more tools, sometimes you’re adding complexity in terms of managing those tools. So you might have a CRM and some planning software, you might have some email campaigns, software, some document storage, businesses, calculators, illustrative software and the like. And say you accumulate these things over time, because they’re good for you for your client and your client experience. But they can add complexity to your back office and complexity to the way you manage data and and manage your client relationships.

 

Fraser Jack 

You mentioned, I want to get into this tools conversationally a bit more, because I think it’s important. And when we think about the past and the history of where technology has come from, in this user experience, it was like there was a shiny tool. It’s great. It’s excellent. We want to use it. But every single one of those tools relied on the structure of the data to be there in some form, and every single tool built built their own storage facility or database where they would store that data. Right. And so the problem, I guess, with many tools is that common Session have many storage devices were all with different cups of information

 

Greg Hansen 

definitely are totally great, I think that is still the case, you get some really useful tools. And they might store some client data that’s useful in some circumstances, but then that doesn’t get transferred to other tools that you have. And so all of a sudden, you’ve got multiple points of data entry. And so that that data quality becomes really difficult to manage.

 

Fraser Jack 

It’s in, you’re right, the more tools are stacked on top of each other. And the more little pots of pots of data that you have, the more you’re going to struggle in the technology that was supposed to speed you up actually ends up slowing you down.

 

Greg Hansen 

That’s right. And that has a lot of implications for the way advisors run their practices for their back office stuff, but also has a lot of implications for licensees as well. You know, one of the one of the costs that continues to increase is that is the cost of licensee services. And partly because that’s the some of the subsidies that existed have been stripped away, but those costs are increasing at the same time. And so we spent a lot of time with licensees in the past and their, their main, the main problem that they had was a lack of access to quality data. And if they’ve got a lack of access to quality data, means the licensee services or become very highly manual, and relatively inefficient and expensive and difficult.

 

Fraser Jack 

Yeah, Greg, I think one of the I think one of the things around that advisors have found over the last few years as a lot of collecting data and collecting signatures from clients. And in a fairly unstructured way, like a lot of wet things has been required. And I think that’s been something that has, you know, hurt the relationship with a client experience.

 

Greg Hansen 

Yeah, definitely click collecting the wet signatures, and the need to have clients acknowledge different different forms, and the like, I think is a big drain on productivity for advisors, they’ll the whole data collection piece is a real problem. It really a lot of clients struggle to aggregate their data and find out find out how much money that they have in superannuation and how much money they have in different shares, direct holdings and the like. So the signing of forms is definitely a problem. But I think that collection of data is a real issue that needs to be addressed as well.

 

Fraser Jack 

Yep. Yep. Now let’s, let’s talk about some of the obviously, you know, we’re talking about advice firms. Is there anything you’re seeing advice firms doing really well in this space and leading the way when it comes to how they, how they set their minds and what they’re looking at when it comes to, you know, the now and how they’re running their businesses? Now?

 

Greg Hansen 

That’s really interesting question, because I think that the pressures on financial advice, businesses are different to the to what they used to be, you’ve only got the latest figures, or there’s sort of 15 and a half 1000 advisors. So the advisors that we speak to a finding much less pressure on growing their business and having new people come through the door, because they are having people come to them and approach them the whole time, their pressures tend to be more from our perspective about efficiency, and capacity, and how you provide more advice to more people and provide more value. So what are those organizations doing that they’re doing? Well, they Systemising their business. They and this is probably nothing new, you know, they’re very clear about their value proposition. And in your previous speakers have spoken very eloquently about the power of getting that value proposition, right, and the client experience, right. So they’re spending a lot of time making sure that the clients feel confident and looked after then they know where they’re going. And they have a good experience in dealing not only with the advisor, but that entire practice as well. And then it’s it’s about managing managing systems and processes and managing data in the in the back office and making sure there’s an efficiency there that can be transferred to client relationships.

 

Fraser Jack 

Yeah, you’re absolutely right about that. There’s certainly the market has certainly shrunk. And there’s a lot of people knocking on doors, and there is a lot of pain around the concept of how do we service all these individuals that need to be looked after and how to provide advice to many people. If we if we think about if we think about this from other markets, you know, we sort of done this for the last speakers as well, we sort of thought about the fact that, you know, we can provide financial advice, space, it’s very easy for us to comment, but you’ve got to have us break down and thinking about things in a different way. Tell us what you’re thinking about from other markets and how they might be using data and technology to really improve client experiences.

 

Greg Hansen 

Well, I think 111 good example is in our industry, but it’s, you know, overseas, from an overseas market, had a look at different ways that digital advice providers have engaged, have engaged clients overseas. That’s something we’re interested in seeing how could that can be applied to the Australian market. So there’s a business overseas called Focus solutions. It’s owned by Aberdeen. And they spend a lot of time on digital engagement, but they they spend it’s quite a specific thing that they do. They work with businesses that have very large client bases, and they look at ways to make sure that those As businesses stay relevant and connected to the clients that they have, now they can’t all afford face to face advice. So they’ve built a series of experiences to make sure that that those clients are connected in the winters and advice event that happens. They are the logical point of contact for those businesses. So they’ve worked very heavily with businesses such as Bruin dolphin and Skipton building society. They’ve built dashboards to help those clients have a basic understanding of their financial situation and some of the things that they can do with their finances. And they’ve been a great source of leads for those financial advice businesses. And in fact, when the Bruin dolphins Brewin dolphin example, they’re at their high net worth business. And they had a lot of children of those clients, obviously, who needed help. And so they introduced introduced this digital advice process. And this dashboard and the various calculators and experiences that underpin that. And the feedback from their high net worth advisors clients is that they would like access to those tools as well.

 

Fraser Jack 

Yeah, that’s really interesting, because you sort of think about it from the intergenerational wealth transfer or getting, you know, the children of the of your existing clients on to this process or being able to provide something for the younger generations coming through. But it’s interesting, tell us a little bit more about those tools and how they work.

 

Greg Hansen 

Yeah, I think one of the important parts here is that they’re not trying to establish brand new relationships. They’re either for existing existing clients who, who once had a fee paying relationship and didn’t anymore, or their children who were introduced by their parents, so they’re not trying to establish these relationships from scratch. So the whole client acquisition piece was not was not really where the value of that software set. What they’re very good at doing is once they’re introduced to provides a dashboard, and then it’s basically, what is your biggest problem? And how do we help you sit? How do we help you solve their biggest problem? And then hold it? How do we help you solve the next biggest problem? So for some of it was saving for a goal and maybe a holiday or a car or a house? And how do we help you to some investments and manage your cash flow in a way that’s going to help you achieve your goal? And obviously, you’ve got some insurance journeys as well, how much insurance do you need? And then retirement savings journeys? And one journey that we were particularly interested in that I thought worked really well was to start with a simple pension estimate, how much how much pension am I going to get? Now in the UK, what’s interesting about that is it’s a standard pension, everyone gets the same, but you still get rent a calculator. And so this is the pension that you could get. And if you enter more information, then it can give you an estimate of your expat or an expectation of your income in retirement. And then it gave us the ability to talk to someone about that. And are there ways to improve that? Is that enough? Those sorts of basic questions? Yeah, we

 

Fraser Jack 

talked about this in some of the other episodes, the concept of trackers and dashboards and just having that, that focus and doesn’t necessarily have to be complicated. Just, it’s just about bringing the attention to the direction you’re heading and keeping focus.

 

Greg Hansen 

That’s exactly right. I think what’s what’s interesting about that is what do you want the technology to do for you? What’s the problem you’re trying to solve? And I think, where I haven’t seen a lot of success in digital digital providers, engaging new clients, but I have seen a lot of success in helping engaged clients, keep up with their journey and get information and good education and make sure that they’re on the right track.

 

Fraser Jack 

And you think that’s where the key will be your to technology in the future is making sure we help engage or clients that are already sort of understand the value of the dial up advice.

 

Greg Hansen 

It’s probably just that I’ve seen that much. I’ve seen it work much more successfully than other models, particularly the models that I’ve seen in the UK in the US, obviously, there are some some examples in the US of organizations that have been good at attracting new clients and engaging new client relationships. I think though, in the Australian market currently, I think there’s a greater need for for those sorts of tools to help people stay on track once they have once they have an established relationship. And

 

Fraser Jack 

and as we speaking of Australia, as we record this with sort of under the we’ve had some information about the quality of advice review, nothing’s official, of course, yet. It might be by the time people listen to this, but tell us what your thoughts are around that. And this sort of digital advice process could fit well into what the proposals are for quality of advice.

 

Greg Hansen 

Definitely. Look, I think there’s some really exciting potential. There’s some really exciting potential for professional advisors, if some of the proposals are accepted. And so one of the some of the things that I think are of most interest, the ability for professional advisors to use their judgment when working out an advice process when a new client comes in the door. So without that prescribed process under the the best interest duty and all the steps that go with it. I think the expectation is that advisors will be able to make use their judgment to decide how much information do I need to collect, and what do I need to do to be able to demonstrate that this is good advice. So there’s sort of two issues there. One is one is What does the client experience look like? I think there’s gonna be a lot more flexibility about the way advisors go in providing and certainly in certainly delivering advice to new to to clients. But then there’s another another matter that needs to be addressed is how do you provide the evidence that good advice has been provided? And you’ve got all the documentation to prove that? Yeah, I

 

Fraser Jack 

definitely think you’re right there with regards to some of those digital forms with, you know, demonstrating the value of the advice has been there. And once you’ve done that, you know, I like the idea of, of advisors being able to actually provide a financial plan rather than an SOA,

 

Greg Hansen 

something someone wants something that someone will actually read,

 

Fraser Jack 

something that might be a little bit more engaging, and visual, and easier to understand, because it might be seen as certain quite clear graphs around the concept of this is where you’re going, this is the direction this is the how the strategy works. It’s a

 

Greg Hansen 

great point, if you’re looking at the role of technology, and there’s one great potential for that, for technology is to assuming those things are accepted. And like they come into legislation, and there’s a great ability, or a great potential for advice to be delivered completely differently.

 

Fraser Jack 

Yeah, yeah, 100%, I’m definitely on that on board that train. With regards to the and then we talked a little bit about data. And we talked about structured unstructured data, I want to I wanted to dive into that and get it get a bit nerdy if we can talk to us about let’s start with just the basic of what you consider to be unstructured data and what you consider to be structured data and how we trends for some of that unstructured data to be to have more structure. So think

 

Greg Hansen 

about what an advisor does currently in their practice, and all those documents that demonstrate the demonstrate the value of the advice and demonstrate the device has been given. So it’s things like file notes, and statements of advice, feed or fee disclosure statements. You’ve got a whole range of documents that sit in unstructured format, emails and the like. And so the problem and we first came across this problem when talking to licensees, that’s all the documents that I want to access to, but they sit in completely different places per advisor. So what what they were talking about was wanting to make sure that the advisors had flexibility in the way they did business. So advisors, self employed business people, they have their own preferences, they have their own client bases, they’re all unique. And they you have different ideas about which tools they want to use to manage that client experience. But what it meant is that you’ve got data stored everywhere. If the the the licensee had no way of seeing licensees had no way of seeing what was actually provided to the client. So I think we have any freaking example where a statement of advice was prepared and explained, I met with a client, I wanted a few changes made that was changed in word it was stored in the CRM. So all of a sudden, you’ve got a whole range of different different documents stored in different places, and the licensees didn’t know what went where. So we’ve been working very hard working on AI machine learning, with the machine learning business, to turn all that unstructured data into structured data. So now we’ve generated that ability. And what I’ve been really successful is choosing a small amount of documents and being very highly targeted at making sure that accuracy rates are really very, very high. So at the moment, there’s there’s one machine that has a look at all the data that comes in overnight from a licensing and splits those into 23 different document types a statement of advice, and FDA says and file notes. And then you’ve got more machines are machine learning engines that have a look at for example, a statement of advice and will extract the name of the client, the name of the advisor and the investment recommendations and the fees and the like. And similarly for FTS is look at what is there a signature on the page, and it’s turning all that unstructured data into structured data. Now, the first bit use case that we that we’re concentrating on is helping licensees, then, but now they’ve got access to structured data, they the quality and efficiency of their services should increase which means that they should be able to provide a better service with better quality at a lower cost. And that can be transferred to advisors so that they’re again, getting a better experience from their licensees at a lower cost. And they can be confident that they will their compliance, compliance measures are made. Where we really want to get to is working with a couple of these licensees is the idea of proactive compliance. So I’ve got a child at high school and before he has slight he submits these assignments, he’s gonna go through a plagiarism check to see she doesn’t want to fast it’s quite late. But it’s that sort of concept. You know, if you’ve got a statement of advice, can you run it through the machine and get an instantaneous response to say yes, we know from a licensee perspective or from a Professional Standards perspective, we’re comfortable that this can be issued. And then you can manage that by exception.

 

Fraser Jack 

It’s interesting process, I want to get into this machine learning concept. But before we with remember the amount of files you need before a machine to actually learn. But yeah, it’s a really good idea, isn’t it to have that product of compliance and be able to say, No, even if the machine’s not picking it up, it doesn’t pick up something from the document. It’s about going, Oh, yes, it was in there on, you know, going back and be able to tick those boxes off and then approve, tell us about that concept of data. Because it’s certainly not within the realms of one advice firm or even one licensee to be able to turn around and go, I’ve got enough data to teach a machine how to do this.

 

Greg Hansen 

So it’s one of the advantages of working with licensees. And one of the great powers of the OG, the great potential for this machine learning is that you don’t need advice to be provided in a specific format for the machine to be effective. So you can train the machine over a period of time. So we’re interested in how we apply this and make this available to FinTech providers as well. So one of our observations is that there’s a range of great fintechs in the market, but some of them required forms in a specific format in order for their systems to be effective. If we can extract that data and feed those forms that the fintechs, then it means that there’s a greater potential for them to for them to be successful. But you’re right, in order for these things to work, and for order for that machine learning to be successful, you need a high accuracy rate. And so working with licensees, we can feed a number of statements of advice through from that licensee from different advisors and different practices, and train the machine. And that’s really the way that will the hard yards. But if you get it right, it becomes enormously powerful. And in the cases of statements of advice and fee disclosure statements, we’ve been able to demonstrate that we can look at statements of advice from a variety of FTAs, from a variety of licensees from a variety of practices, and retain that accuracy level.

 

Fraser Jack 

Yeah, it’s interesting, isn’t it. And I like the idea of working with the FinTech providers, because you’re right, because if everybody’s got a machine they’re trying to teach, it’s, it doesn’t work, it’s but if everybody’s teaching the same machine, it makes more sense.

 

Greg Hansen 

And there’s a couple of to add to that. What it means is if you train the machine, then you can actually run the machine past all statements of advice that have been generated in the past as well. So you get access to immediately to a much greater source of information and data. And then you can make that available to fintechs. We think there’s, we’ve got a great part to play in assisting in enabling fintechs to be more successful. What hub 24 has a capability of doing is providing that data and providing the data infrastructure, what we’re not going to be doing is building the FinTech tools. But if we can provide that data to more fintechs, and make them more successful, then we think there’s a valuable part to play.

 

Fraser Jack 

So this comes back down to the conversation we’re having earlier around the cup of data for each tool, just having one you’ll just go with the data lake or the data storage facility or the factory, what are you going to call the warehouse, one zone one source of truth that tools can use to dip into rather than having to build their own database?

 

Greg Hansen 

That’s exactly right. Yep, that if we can provide a data infrastructure, and that people can trust the data, then we think there’s there’s a whole range of different ways you can go with trusted data. Now what some of the things that we’re using it for, is for things like the present functionality, we were told by advisors that they really struggled to provide to generate reviews in a timely fashion. And so one of the things that we can do with trusted data is help advisors tailor and construct and tailor a review document in a matter of minutes, rather than a matter of hours. As it as one example of things you can do with trusted data.

 

Fraser Jack 

I want to get into this concept a little bit deeper on this if I can, because it is always may or may not be the thing that we do for the next 10 years. Yeah. But But if we’ve got that all those is always from the past. And we’ve got that concept of what is good advice based on the past, we then have a benchmark of what good advice could be in the future that we can then present to as the benchmark of good advice, because that’s something that’s been debated at the moment. What is good advice?

 

Greg Hansen 

Definitely. I think it’s a really good observation. I think there’s a lot of power in that. I think, obviously, advisors will be excited about the flexibility that would have not only to provide a statement of advice from a licensee perspective, it probably makes them really nervous because they’ve got a system that they need to follow at the moment. And so they can build systems around the different steps of the process. But if you don’t have that system, and you just need to demonstrate good advice, then how do you do that, but I think tools like this with access to the data from years past, then you can then use that information to construct systems that licensees will be comfortable with that it retains the ability for the adviser to have some flexibility about Why’d they provide advice? Now more than that, as well, I think we can use some of the tools that we have to prove the the the benefits of advice. So for example, if a statement of advice or a document is issued, that captures someone’s current position with recommendations, then we know those recommendations might be executed via pub 24. We’ve got access to their properties, the situation that they had, their goals and their their attitudes and the like, that could all be captured. And we’re interested to see how we use all that data in an ongoing sense to prove the value of advice. Can we use that to, to, to not only focus on the emotional benefits of advice in terms of peace of mind and confidence and the like? But also, what are the hard numbers? How do you demonstrate that advice? How much advice how valuable advice is,

 

Fraser Jack 

Oh, I’d love to see that. I’d love to see that. The fact that it’ll, as you said that proof of whatever that the structure of the advice being provided in, in my, in my brain, that’s a financial plan. But, but then I’ll just say, we know this, there’s a bit of position and without using the better position statement, but that you’re in a better position, both logically for dollars and also emotionally and just having those two scales to say, yes, better off, even like with insurance, insurances always, you know, be one of those things that you go, will you spend money on a premium? And if you don’t claim, you’re worse off, aren’t you? But then within the peace of mind out Trump, you know, of having that in place, you know, outweighs that that better position? So I think, I think, yeah, have been able to have those two scales. And, and as you mentioned before, like that, that process around a dashboard or a tracker to be able to demonstrate whether it’s up to,

 

Greg Hansen 

and some of that some of that is is might be investment related, for example, but a lot of it’s going to be behaviorally related, you know, how much money were they saving before was the cash flow? Like? What’s the cash flow like after you can demonstrate that they might be in a situation where they’re, they’re now appropriately insured, and so the cash flow has changed, but because of behavioral change, you’ve you’re saving more money, or you’re in a more financially secure position than you used to be? Because you’ve changed the way that you’ve managed your money?

 

Fraser Jack 

Yeah, I think I think this is certainly the key to you know, that better advice conversation in the future, being able to then demonstrate using that structured data format, and some smart dashboards around the concept of just you know, this is exactly where you’re, you know, the value of advice.

 

Greg Hansen 

Exactly, right, exactly. Right, everyone, everyone who has received advice, but not everyone. Almost everyone who has received advice appreciates the value and understands the value of it, we need to be do a better job communicating that to new and younger clients.

 

Fraser Jack 

Yep. How do you how do you see this looking in the future with regards to the client experience? And they’re coming through? Do they open an app on their phone? Is that what you’re thinking? Probably in

 

Greg Hansen 

the in the longer term? Yes, there are some things that we’re trying to solve in a shorter term. Before we get to that point. And from advisors perspective, the two things that we’re concentrating on are how to provide a single view of wealth for the advisor and the client. And how do you provide one way of doing business for the advisor. Now, there’s two issues that other people didn’t Jason and Priscilla within 24 speaks very eloquently about. And this is the original concept of, of, of platforms that has never been realized. But we think with it with the right data infrastructure, then you can provide a single view of wealth and that might be across, obviously, custodial II held assets within the platform, but noncustodial Lee held assets as well might be direct property, or bank accounts and credit cards and the like, we should be able to provide a single view of wealth efficiently and easily that advisors and clients can work with. And if you’ve got that, then by extension, you should be able to build tools that manage that, that entire client portfolio. So it might be about rebalancing or fees or corporate actions and the like. So how do you increase the efficiency of the way that the services that an advisor provides are delivered? So shorter term? I think we’re focusing on some of those sorts of issues, but longer term, how do you then use that data infrastructure is really, again, where some of these fintechs and advisors get involved? If you’ve got access to trusted data, then what can you do with it? And I think, the ability to generate apps and create unique client experiences, or something that is going to be possible and really interesting, if you’ve got access to trusted data, yep.

 

Fraser Jack 

And that source, that single source of truth, and I like the idea of a single variable wealth, but obviously that any as you’re just sort of saying that it’s not if that doesn’t exist in one moment, like our past documents have always been, it exists every day and with behaviors and tracking and changes in the way that people change their behaviors and, and then the ability to be able to introduce for an advisor be able to get a notification saying, hey, there’s a couple of strategies that might help. At this time. It’s time to talk to the client, the provision

 

Greg Hansen 

of proactive advice, I think it’s something that everyone all advisors would love to be able to do. Exactly right. Maybe to be able to get up to go to it. Have a client site with will have identified this opportunity for you and this specific circumstance, if you make these changes, then you’re going to be x better off or that or this much closer to your goal. You know, you do want to proceed.

 

Fraser Jack 

So Greg got one of the things that I, I love this question better because it’s sort of, you know, talks about the concept of, you know, we always build and reader reiterate upon that the existing stuff that we’ve already got, and we try and make things better and better and better. And sometimes we have a crappy system, and we make it fast, and we take a crappy system to the client faster. But if we could start from scratch and think about, you know, like, creating advice, creating an advice firm of the future, you know, we’ll be starting what we do and making sure that the clients are brought along for the journey, and what would be the ultimate in your mind if we were just sort of redesigning this from scratch?

 

Greg Hansen 

Such? It’s such a good question. It’s such an interesting question. And I’d love to be able to say something mind bogglingly amazing little, it’s gonna change the way people think about advice. I’m not, because I think I think the answer is just in the basics. I think the answer is, it’s very highly aligned with some of the things that your previous guests have been saying, What’s your value proposition? You know, what’s your target market? What do you how do you segment is? How do you segment properly, what services you’re providing at what cost is that the basics of business planning, and I think those things have been spoken about a long time, because advisors in my experience, across the board are very technically very gifted. But not all of them, except excel at running a business that the accounting financial advisors because they’re interested in financial advising and talking to people, different advisors have different levels of abilities to run a business, I think the other thing that we’ve got to acknowledge is that we operate within such a structured regulatory environment. And I think that’s one of the things one of the reasons that people are interested in the potential or the quality advice review. Because if you change the rules, you change the way the game is played. And we’ve seen that really clearly with FIFA, and the Royal Commission, and you change the way that the industry will you’ve changed rules, and you’ve changed the structure of the entire industry. We’ve seen the the major institutions disappear from the industry of the rise of boutiques and privately owned businesses, it looks completely different to the way it used to because you’ve changed the rules. And if you changed the rules, again, we call the advice review, I think we can expect such a fundamental change. But coming back to original question, those rules matter. So it’s really difficult to to provide a system as a service and an experience, it’s really different to what’s currently there. Because it’s so highly regulated, these are the things that you must do, in order to provide advice. This is what you’re the advisor must look like this. And the advice must look like this. So I think it just comes back to business basics, value proposition segmentation, servicing and pricing, ideal client, target marketing, those sorts of things.

 

Fraser Jack 

Yeah, knowing your costs and knowing where to cut them back. I want I want to talk about the idea of cost, because I think all of the things that we’ve talked about, you know, is able to, in the long term, reduce the cost of financial advice,

 

Greg Hansen 

played golf with my brother and a couple of months a little while ago. And it was such a it was this does have a financial services point to it. But it was like, we all have have workarounds for things that we’re doing. So my brother, I will aim left and hit it hard, because he knows he’s gonna slice it right. So I’ve got another mate who’s got 400 different changes to his swing, because he knows that he can’t hit it straight unless he does these things. I can’t put this over laughs I’m trying a new technique every day, but it none of us are addressing the fundamental issues that we need to go back and work on a fundamentals swing. So all the things that we’ve been speaking about, I think what’s what’s the fundamental issue? fundamental issue is that advice is really expensive. The cost of advice exceeds what most people are willing or able to pay. And it is getting worse. Cost of advice has always been expensive. And so there’s always been a range of subsidies that mean that people can get advice. Those subsidies have been stripped away. And now we’re seeing advice costs, conservatively, three and a half, more like $5,000. And so fewer and fewer people are accessing initial and fewer and fewer people are accessing ongoing financial advice. And there’s a bad outcome that’s been recognized by the government. They’re looking at they’ve instituted someone to look at increasing access and affordability, we need to look at ways of reducing the cost of providing financial advice, increasing the efficiency of providing financial advice and making sure more people get it.

 

Fraser Jack 

Yeah. And with that efficiency, hopefully we can throw that effectiveness piece in there as well, which is the really the the client engaging and being involved in not just becoming cheaper.

 

Greg Hansen 

Definitely, definitely. I think some of the again, if you’ve got access to trusted data, there’s a whole range of services and tools that you can employ to make sure people are getting value and how then how do you demonstrate that value? We’ve seen that the power of financial advice to fundamentally change people’s lives. We need to Make sure that more people can access that.

 

Fraser Jack 

Yep, yep. Now what I want to talk about these advice firms that are existing at the moment that they’re busy, they’ve got a lot of work on them they’re doing, you know, they’re trying to improve things incrementally what what are your thoughts around those practices? What should they be and can be doing to maybe some quick wins or just some some concepts around what they should be thinking about when it comes to both digital, the client experience and the use of the data and their practices?

 

Greg Hansen 

Well, I’ll get to data and data in a moment. But one of the great increases in efficiencies that we’ve seen is for the use of managed portfolios, that’s a piece of technology that, that a number of advisors have adopted, to great to great success. I think I saw a statistic the other day from investment trends, that the average advisor adds 16. And that’s 16 hours a week or something through the use of managed portfolios. So the advisors that were speaking, speaking to reflecting that they have a better client experience, the clients have a better investment outcome. And they’re saving time and money and effort through the use of professionally managed managed portfolios.

 

Fraser Jack 

That’s definitely one way of doing it any any other tips around technology that people can think about in their practices?

 

Greg Hansen 

Look, I think for us, it’s also much about tools. For us. It’s about how we, how we create that data infrastructure, so that advisors are in control of the tools that they use, we want advisors to be able to use the tools and the latest and greatest that come to market without adding all that complexity in the in the back of their practice. So if we can create that data infrastructure, then how do we make sure that advice, those tools can plug easily in and out of your data infrastructure? That means that clients will get the right client outcome and the client experience the experience that the advisor wants to generate, but you don’t create enormous degrees of complexity in the back office.

 

Fraser Jack 

Yep. Now I want to quickly touch on the client data, right? Or open banking from a data point of view as well. One of the things I wanted to cover in today’s episode was that conversation around, you know, as a as a large platform, you’re you’re gathering this data, and how will advice firms be able to use that in the future with when it comes to that open banking concept.

 

Greg Hansen 

So I think there’s enormous efficiencies to be gained in the initial collection of information and collection of data. You know, we’ve spoke previously about the fact that it is really difficult for an advisor to get hold of all the relevant information that a client has. And hopefully that would make it much easier, which would reduce the stress and the cost and the time involved in that initial advice process. And then from an ongoing and ongoing relationship perspective, access to that sort of data should help the adviser to be able to provide greater value to clients in terms of managing their behavior and demonstrating value over a period of time. So you’ve got much better access to the client’s entire financial situation and should be able to manage that on a much, much more easily, which means that you should be able to help them make the changes necessary for them to achieve their goals.

 

Fraser Jack 

Yep. Fantastic. And as you mentioned earlier, you’ve been working on that machine learning part of getting that unstructured data into structured data, are you able to give us a bit more of a sneak peek of what’s happening behind the scenes with regards to what that might look like for advisors to be able to dip into that concept of having that all their data in one place?

 

Greg Hansen 

Yeah, so it’s a really good question. At the moment we’ve they’ve been very focused on licensee outcomes. They’re how you how do you improve the effectiveness and efficiency of what they’re doing at a lower cost? But the point is that, then you’ve got access to all that data. And then what what do you do with it then and we haven’t turned our mind we’re very keen to turn our minds to what can you do for advisors, by having access to all that data? Now, the first first very simple thing you can do is provide benchmarking. So we could benchmark advisors across different geographies across different lines across different licensees, and help help advisors recognize where the greatest efficiency gain within their practice might be. So if you want to go to the next level of profitability and value in your practice, then what are those high value activities that you could be doing, and helping them understand what other people are doing? So that’s, that’s an example of an advisor of an advisor outcome. Another example, is to use that data for a single view of wealth if you if you can, rather than try and collate all the information that you have and construct reconstruct their client portfolio in a third party and another third party system, then how do you make sure or how do you give an advisor the ability to have a single view of wealth for their client in all circumstances at all times? And then if you’ve got that, then you should be able to manage their entire portfolio and more easily as well.

 

Fraser Jack 

I love I love the concept of being able to aggregate that data and have a collective view of what is good advice, a collective view of what was a good strategy for that that situation, you know, what do the majority of advisors in the country do in that situation? I love that be able to concept to be able to create that benchmark to say, this is appropriate because, you know, 95% of advisors around the country would recommend this same strategy at the same point in time.

 

Greg Hansen 

Yeah, it’s a really interesting one, isn’t it? This advice is difficult, because you can have two identical accent, you’re not identical situations, but the advice that you would give them would be different because their attitudes are different in their goals and perspectives are different. So but to have that sense of, of this is what good advice has looked like in other circumstances, I think is really valuable for advisors and clients. But it also means it also means that for advice to be really valuable, it needs to be tailored. And how do you make sure that advisors are able to tailor their advice?

 

Fraser Jack 

It’s, there’s so many different proof points, isn’t there to try and capture this. Greg, thanks so much for coming on and chatting to us today about the client experience of our data and technology and how all that overlays and works together. If somebody wants to reach out to one of your team, probably what’s what’s the best way for them to reach out

 

Greg Hansen 

via our BDMS 24 BDMS is going to be the best way. All the contact details are on the website, but they’re very keen to talk to you. So I’d say yes, please get in contact with one of our BDMS

 

Fraser Jack 

Fantastic, Greg, thank you so much for coming along, giving us a bit of an insight into what’s going on behind the scenes and in your mind, which has been an amazing experience. Appreciate you coming on and sharing your ideas. I

 

Greg Hansen  

really appreciate you having me on Fraser Thank you. Thank you very much.

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