by Russell Hutchinson
You can compete, and some of the global digital tools are making it easier, not harder, for the smaller adviser business with a modest IT budget to join the party.
Financial advisers in the wealth management sector have been using apps such as Pocketsmith, Better Money, and others to create more engaging and active advice offerings.
Using existing applications, advisers can set up notifications on key metrics – usually to alert them when there is money available for investment – or, for life advisers, for other things.
Then the adviser calls the client to discuss investment options.
Clients are delighted by the service for which a monitoring fee is charged.
Advisers enjoy a great gain in time – they know from the alerts which clients to spend time with. Also, clients tend to know themselves: those that suspect they are unlikely to have free cashflow in the near future are unlikely to sign up for a monitoring service.
This is a valuable revealed preference signal which surpasses a stated preference in accuracy. Clients that don’t want to play, are less likely to be worth a lot of time.
Could such apps have an application in insurance advice?
Financial monitoring apps could have a big role in monitoring the ongoing suitability of insurance. Although the use of such services in a pure risk context may be harder to justify from an expense perspective, but in a mixed or general financial advice business it is easy to see how two or three additional data points could be valuable in making a much more meaningful review service.
For example:
Income change – a sharp increase or decrease may indicate a life event which requires the adjustment of cover or could indicate a claim event.
Expense change – a sharp increase or decrease could indicate the addition of a dependent or a change in financial position which, likewise, should trigger a review.
Debt balance change – similarly, but with more direct relevance to insurance. As increasing debt is perhaps the event that leads to purchasing insurance this could be linked to an offer to top up lump sum and income benefits – perhaps even an automated offer.
Ultimately these could be as popular and engaging as wearables and fitness applications. They already exist and many will permit connection to people in coaching roles.
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