Why we started Advicefront
A few years back, one of the people I most admire in the industry changed my career trajectory with a single sentence.
“Why don’t you build that for financial advisors? We could certainly use something like it for our clients.”
We were in the Dimensional offices in London and the person I was talking to was Sam Adams — an outspoken, charismatic and relentless advocate for financial science who was trying to poke holes in my latest business venture idea.
Dimensional Fund Advisors, or DFA for short, is the remarkable and marketing shy firm that pioneered index funds, the most efficient and now popular investment solution in the world. To give you a sense for the calibre of brains that run around DFA’s offices, their head of research is Eugene Fama — the Nobel prize winning economist who almost single handedly created the framework most professionals use to invest in global financial markets to this day.
I was pitching Sam the concept of online advice, long before the ‘robo-advisor’ hype, and it piqued his interest. However, the epiphany came when we realised that good financial advisors already owned what ‘robos’ will either never have or will spend many millions acquiring: their clients’ trust and respect.
My informal conversation with Sam Adams was the humble beginning of Advicefront, a business idea which was born out of passion for financial science, truth and doing right by clients.
Sure enough, something that started out as an idea in the back of a napkin evolved into a fully fledged product and, I hope, a movement that has the potential to change the way financial advice is delivered.
The following are my main convictions about why Advicefront should exist in the market, why everyone in the future will have access to high quality financial advice, and also what this means to finance advice professionals who are serious about growing their business.
1. Investing is becoming a commodity
In the past consumers needed a technically savvy advisor to help them build a portfolio. Now all they have to do is use an app to get this service for a fraction of the price it used to cost. That’s why smart financial advisors will focus on behaviour coaching, emotional support, listening intently, and the complex aspects of multi-generational financial planning.
Human trumps robot
In his book ‘To Sell Is Human’, Daniel Pink says the following:
“In the new world of sales, being able to ask the right questions is more valuable than producing the right answers. Unfortunately, our schools often have the opposite emphasis. They teach us how to answer, but not how to ask.”
Every advisor or financial planner worth his or her salt knows this. It’s in those moments where everything important is at stake that you need someone you can trust (think divorce, career decisions, family situations). An advisor who asks really good questions and, more importantly, truly listens at such critical life stages, gains a client for life. No ‘robo-advisor’ can take this job away.
2. The Web’s massive lie detector
If there’s something that has come out of the Web revolution is that people are no longer buying the sort of financial nonsense that used to be sold to them in the past. False promises, fine print, hidden fees or pushy sales methods are becoming a thing of the past.
Now consumers decide in real time if they will trust any company in the world, including financial advisors, and personal relationships will reign supreme. People look to their peers more than ever when buying a product or engaging in business with someone. Social sharing, professional reviews and star ratings are now huge drivers of success for businesses, and this is the direction where financial advice, too, is headed.
3. Making financial advice cool
Our vision for the modern financial advisor is centred around helping them attract clients from a younger demographic, who are willing to be engaged in planning their financial lives in a compelling way. By making available intuitive and fun online tools, collecting data from multiple sources and organizing it like a game, using simple but robust cash-flow analysis and basing all your conversations around your clients’ lifestyle goals and values, you could well become the coolest advisor around (or if you are already cool, you may end up achieving Samuel L. Jackson status).
4. A private bank for everyone
We believe that in the future the financial advice industry will become more decentralised, connected and diverse, and that it will likely resemble more of a rich ecosystem with many specialized and local agents, and less the Orwellian landscape populated by mega-corps that many envisioned before the Internet took over. And this opens up a fascinating potential for all forward looking advisors. We also believe that financial advisors will have access to the same or even better tools as the largest banks in the world, and that clients will want a single point of contact for all their financial matters.
5. We are building a network of trust
Can you imagine what the financial world would look like if independent firms could compete with the biggest brands in finance? Once independent advisors are empowered with the right technologies and training, the sky and human creativity is the limit. The stronger the network gets, the more everyone in it benefits from having access to truly outstanding tools and experts such as you.
Let’s build the best online financial advice platform in the world.