Do you have a post COVID advice model?

COVID 19 has had profound effects on many industries, and the financial advice industry is not immune. On the back of the Hayne Royal Commission, FASEA, bush fires and now a health crisis, the pressure on financial advice practices and licensees is a paradox of challenge and opportunities. The industry has been affected by the   increased compliance costs, new educational standards, changing revenue models and changed advice models.

Advisers and advice practices are experiencing different outcomes. Some are building stronger relationships with their clients and taking advantage of the reducing number of advisers across the industry to bring on new clients and create new revenues. Whilst at the same time, others are finding limit growth through new clients or existing clients unsure on what the next step should be in risk, super and investment outcomes.

Both these situations have impacts on the approach a practice or licensee needs to take with managing in a time of crisis. One thing that is for sure is that both models require advisers to have adequate support teams to enable their client service to be maintained at a high standard. But how do you manage this in these circumstances? Will the revenue growth be sustained post COVID, or will COVID sustain itself longer and impact the ability of the business to operate effectively?

RegTech as Support

It is essential for advisers, advice practices and licensees to maintain the quality of the advice and ensure that you are acting in the best interests of your clients. This is where RegTech solutions can help by enabling you to monitor and control your advice risks and outcomes and identifying trends and learning opportunities to improve the advice outcomes for your clients.

Improving financial advice is not just about checking all the regulatory and compliance boxes to meet the high standards expected by clients, licensees, AFCA and regulators.

Advice can be complex, subjective, and governed by principles-based legislation. It needs to be in the client’s best interests and is derived from a vast number of regulatory and legal requirements. This results in the content and disclosure requirements needed to deliver appropriate advice being time consuming and risky if compliance is not managed effectively.

Not to mention the impacts of not getting it right are costly and distracting.

Increasing your coaching opportunities, being able to understand your advice, identify trends, risks, areas for improvement quickly, and with better compliance outcomes are needed.  As are building your culture of compliance and continually improving the advice outcomes for your clients.

Importance of Real-time Data Insights

Having reporting, data and insights available that help to identify risks, understand compliance and processes has never been more critical for delivering quality advice.

ASIC has been clear on where RegTech can help in the financial advice process.

“ASIC considers that the RegTech sector has enormous potential to help businesses build a culture of compliance, identify learning opportunities, and save time and money relating to regulatory matters.” RegTech solutions can help identify risks and learning opportunities more efficiently and effectively.

Compliance at the Leading-Edge

The rapid change in technology, and emergence of quality RegTech solution, is creating new and exciting opportunities for you to capture data and create insights into your advice that historically had been seen as too difficult or time consuming to capture. In addition, RegTech creates the ability for costs to be variablised in line with advice volumes and resource demands. Boards and regulators have increasing desire to access information faster and in increasing detail, whilst asking teams to find ways of doing more with the same or less resources.

Fourth Line is an example of a RegTech solution for financial advice risk management and compliance that can help to improve the quality of financial advice, draw deep insights from analytics on advice which can enable the identification of risk, compliance and learning opportunities. Fourth Line’s bionic approach leverages leading Artificial Intelligence (AI) and machine learning tools, in conjunction with human oversight, to help you understand and manage your advice process. Fourth Line enables your advice and compliance teams to focus on coaching and improving the quality of advice, rather than checking and reporting.

Fourth Line is a bionic rigorous RegTech risk management and compliance system for advice practices, dealer groups and other wealth management participants. Fourth Line uses algorithmic approaches to simplify the complexity in advice reviews whilst maintaining human oversight, empowering compliance teams to coach and develop strong advice behaviors through data driven insights from advanced analytics for adviser, practice/dealer group and industry benchmark comparison whilst centralised document storage and access to meet regulatory needs.

For information email: info@fourt-line.com.au