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Six key trends in financial planning

Distribution Technology chief executive, Ben Goss highlights six key trends in financial planning and why financial planning technology will be required to help firms respond to the challenges and take advantage of the opportunities they present.

1. There will be greater demand for financial planning. As the population ages and those approaching and in retirement, having accumulated wealth, have to decide how to access it. Changes in the last Budget make these decisions more complex and as a result there is a greater need for planning. Having strong ‘at’ and ‘in’ retirement analysis which can deal with the range of solutions available will be critical to planning solutions.

2. There will be a greater supply of financial planning, driven by advisers who move from product sales to “long to” wealth planning and management propositions. Professional advisers require the tools to do this effectively. In the US, turnkey software-as-a-service financial planning vendors have won most market share at the expense of ‘build to order’ solution providers as they can leverage the product development budget necessary over larger client bases.

3. Continued focus on suitability from the Regulator as the source of many industry issues will mean that planning solutions will need to have a suitability model embedded from end to end; from profiling the client through, implementation, through to monitoring.

4.  The economics and risk of wealth planning and management are too challenging currently. The provision of financial advice as a manual process is too costly and risky. Technology needs to be applied to deliver more consistent, high quality outcomes for consumers, advisers and product providers. The removal of data islands and re-keying in the process of profiling, planning and management is essential to the profitability of the industry and the reduction of risk. End to end solutions without re-keying will be fundamental to successful and profitable planning.

5. Consumers will want to do more themselves, whether as individuals or as employees and planning solutions will increasingly need to support this demand. In the next few years we believe that the winning formula will be the combination of digital access and human advice, both face-to-face and over the telephone.

6. The rise of mobile means that consumers will expect to access information and analysis about their finances and financial options digitally, online and mobile. More Internet connections are now made via mobile devices than browsers. This trend is only set to continue and it will be key for financial planning software to respond to this trend.

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