Five IFA & planner essentials

Whether you are desperate for a digital detox or you bring it to the toilet with you, your tech has the power to transform your business (as well as providing some entertainment while you wait for the bus). 

When it comes to our personal phones, we know full well that not all operating systems are the same, so surely we need to be as discerning about the technology we choose for our financial planning businesses. Now that we’re all agreed on that, here are some key pieces of tech that we know are key parts of any IFA’s toolkit. 

It’s a wrap (platform)

Wrap platforms revolutionised financial planning when they were first used in Australia back in the early noughties. Although they have evolved since, today’s wrap platforms still do what they were first developed to do – link funds, tax wrappers, investment choices and adviser charges. Full wraps are not to be confused with fund supermarkets; the former offers wider access to other products as well being as a useful tool for financial planners who want to agree their own remuneration. There has been plenty of consolidation in the wrap platform market. The main players include FNZ, Standard Life’s Elevate (this used to belong to Axa until Standard Life acquired it) and 7IM’s offering, which stayed true to its disruptor roots by cutting fees for clients with assets over £2m last year. Other providers we heart include AJ Bell, Nucleus, Parmenion and TruePotential; which along with all full wraps, make clear that the client is the end-investor who pays for the administration service provided.

Risk profiling

Nearly all such tools, the most popular being those offered by FinaMetrica and Oxford Risk, follow three stages, including a risk tolerance test, a capacity for loss assessment and a ‘risk required’ analysis. That is the science bit. Most risk tolerance questionnaires are basically a psychometric test. Some tools add in a stochastic projection (a way of projecting portfolio growth) just for good measure. Not all providers are the same – FinaMetrica, uses a risk tolerance psychometric test which has been used widely among academics, whilst others like the Capita Financial Software’s Synaptic Modeller tool uses a stochastic projection, developed with Barrie & Hibbert, the stochastic modelling experts back in 2013. The modeller was created to address concerns the FSA raised about the use of third-party tools when assessing clients’ attitude to risk.

Cashflow modelling

Cashflow models used by providers including Voyant and CashCalc calculate the required rate of growth for meeting clients’ investment  objectives, which is then cross-checked against the client’s risk attitude. This is tech that also helps sell the advantages of fee-based financial planning over commission-based financial advice. More importantly, it can help clients understand how realistic their investment goals are and what they may need to do if they aren’t. 

Fund research and platform comparison

In a post-RDR advice landscape, fund research has come into its own. Research providers such as Square Mile, Morningstar’s Star ratings, FE’s Crown and the Adviser Centre are among some of the providers. Fund research can help advisers – who want to build and construct their own model portfolios. Following on from the plethora of wrap propositions, due diligence now requires advisers to prove that their clients (and not just themselves), are being well-served by the platform that they choose. Online, comparetheplatform.com and adviserasset.com not only offer  comparison tools, but research and analytics that allow advisers to cut through the complexity involved with selecting a platform. Unlike their more consumer-facing counterparts, they don’t offer advisers cut-price cinema tickets or cuddly toys; which is just as well.

Back office tools

Data management and back office service providers promise to manage each part of the sales cycle, with front, middle and back office functions. They can cover all sorts of processes, from lead generation and marketing to fact-finding, regulatory reporting, accessing accurate MI to tracking fees and income. Intelliflo are one of our faves, not just because our software has the ability to integrate with theirs. They provide an end-to- end advice process solution through cloud-based software, with a focus on saving time and increasing revenue. No discussion on saving time and revenue for advisers would be complete without a shameless but necessary mention of our Onboard software, which covers fact-finding, risk tolerance, digital client agreements and recurring payments, all from a single dashboard. For more of our favourite things, revisit my blog on ‘playing nice’ with integrations

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Andre Costa

Andre Costa

CTO & Co-Founder of Advicefront

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