How can advisers enhance customer engagement?

The planned launch of the well-publicised pensions dashboard has been pushed back to 2023, dealing a heavy blow to the implementation of an important technological advancement in our profession.

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Nick Eatock | Intelliflo
13th November 2020
Nick Eatock Intelliflo
"[A]lmost half (48%) of all pension pots were accessed without taking regulated financial advice"

Originally announced in 2016 and due to be operational in 2019, the dashboard was touted as helping us all more easily keep abreast of our retirement provision. The concept was to allow consumers to see all their private, company and state pension arrangements on a single, online interface. Not only would it help ensure people didn’t lose track of their retirement funds – according to the Pensions Tracing Service there is an estimated £20bn currently floating around in lost pensions – but the dashboard was also supposed to increase customer engagement with their pensions. The ability to view all pensions details in one place meant people would have a far better understanding of their prospective financial position in retirement and that awareness would drive greater action to ensure a comfortable future in later life.

I’m sure most advisers will agree this is disappointing news; anything that improves consumer engagement with their finances is to be welcomed. Clients who fully buy into the advice process are likely to benefit most from the experience. Creating engagement centres on the trusted personal relationship the adviser has with the client, and technology is invaluable in supporting this human connection. By tailoring the individual customer experience using technology and tools, firms can ensure each client has a positive, compliant experience and thorough understanding of their financial plan.

This can start from the very first meeting, by offering clients a range of contact options. Phone and video software such as Microsoft Teams, Skype or Zoom have been available for some time as an alternative to face-to-face meetings. While some advisers were using this software long before the Covid-19 pandemic, social distancing measures have undoubtedly forced more advisers to adapt to dealing with clients remotely. However, feedback from advisers suggests that most clients have embraced the switch to digital. When conditions allow, I am sure there will be a return to face-to-face meetings for many, but offering clients the choice helps build a journey that suits each customer’s personal needs, making them feel valued from the outset.

During the initial planning or subsequent reviews, interactive tools can also help drive engagement with the financial plan. For instance, cashflow modelling software can help focus the client’s mind on what they need to do to reach their financial goals, while forecasting calculators allow advisers to illustrate how different options are likely to affect the client’s future financial situation.

Using technology to streamline processes and cut out manual steps can also improve the customer experience while saving time and resources. Covid-19 has accelerated the trend for paperless transactions with usage of Intelligent Office’s DocuSign functionality increasing by 366% in the four months to end of July. Similarly, the use of interactive technology such as client portals, where advisers and clients can exchange documents via a secure online hub, can also aid the relationship. Again, usage has increased substantially due to the pandemic, with our data showing that new advisers using the personal finance portal rose by 426% between April and July.

Research conducted by the Financial Conduct Authority, published last year, showed that almost half (48%) of all pension pots were accessed without taking regulated financial advice. Given the complex and often irreversible nature of at retirement choices, customers failing to make informed choices risk draining their pension funds too soon. However, research from Columbia Threadneedle suggests that the Covid-19 crisis had prompted many people to re-evaluate the benefits of financial advice, with a third reporting they value it more. One positive legacy of the ongoing impact of the pandemic may be that it encourages more individuals to seek help around these important financial decisions.

It will take time for financial advice to reach a broader range of people. But for those who do seek professional advice, there is much firms can do to drive engagement, using technology and interactive tools to enhance the experience and build on the solid foundations of their personal client relationships.

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