Tomorrow’s world may be your saviour

IFA Life’s Philip Calvert explains why IFAs should embrace the internet.

When you attend a conference on social media in financial services, you would naturally expect to meet early adopter IFAs who are already excited about the opportunities ahead for communicating and engaging with clients online.

After all, when consumers want information on financial matters, the first place most of them go to now is the internet, and clearly the internet is going to completely dominate distribution in financial services over the coming years. It is a fact, and high time this industry got used to it.

What is still surprising, though, are the looks of shock and amazement when IFAs get a glimpse of tomorrow’s jaw-dropping technology that will soon be commonplace.  Looks that tell you they have just seen the future and a realisation that it is going to change everything.

And that is what happened for the second time this year when IFAs attended Social Media in Financial Services 2 in Old Windsor last week. While huge numbers of IFAs still refuse to even acknowledge that financial advice can be given online, attendees at IFA Life’s conference were left in no doubt that technology and the internet will have significantly more impact on their businesses than the RDR ever will.

In fact, the more astute IFA realises that technology and the internet will be the saviour of many IFAs and is the answer to all of their RDR headaches. It is the magic bullet that will help what many regard as a tired looking industry to reinvent itself and transform into something more appealing and more relevant to today’s internet-savvy consumer.

Clients ‘over a certain age’

That is usually the cue for hundreds of IFAs to say their clients are in their sixties, seventies and eighties and therefore are not interested in the internet, which is the reason why they still do not have a website.

Oh, really? Have you ever asked these clients if they use the internet? Of course they have not asked them. These IFAs are still locked in a mindset that says if someone is ‘over a certain age’, they cannot possibly be interested in the internet.

Yet every piece of data and research shows the internet enriches the lives of consumers of all ages.

I still remember the IFA who told me that he does not have a website because his clients are business owners in their forties, and therefore could not possibly have time for the internet.

Yet, whether these ill-informed IFAs like it or not, it is technology that will change everything. The technology to offer online financial planning and advice is being used already, and it is coming here soon. And for me and millions of consumers, it makes the whole business of handling money a lot more interesting. With the arrival of the iPad, tablet PCs and mobile devices, managing your money just got a whole lot more fun – for people of all ages.

Above all, the biggest issues for the profession right now are trust, professionalism, appeal and niche expertise.

Rebuilding trust and professionalism

Take trust and professionalism. The fact is that anyone who deals with money is under the spotlight. From bankers to MPs to financial advisers: if you handle money, you are being watched by consumer groups, regulators and the media. And if you step out of line, you get smacked, and your reputation is tarnished for a long time.

Our industry in particular has much to do to rebuild trust in the eyes of each of those groups, not least of which are customers. Customers who can get anything they could ever want online and rightly ask: “Why pay an IFA when I can get all the information I want and need on the internet?” DIY financial planning may sound impractical and impossible without years of study and expertise, but it is happening, whether we like it or not because the internet makes it easier and more interesting than ever before.

The challenge for the IFA community is to reinvent the financial advice business model in a way that is appealing, exciting, relevant, engaging, quick, straightforward and profitable. This is where the mass market will be, and IFAs who choose to close their minds to the idea that a mass-market proposition is viable will miss out on the biggest opportunity the industry has ever seen, and technology will be the route to market.