The journey to better goals based advice

Last week we announced our partnership with AGBA (the Association for Goals Based Advice) and we are very excited to be part of the movement that delivers better goals based solutions for advice practices. Today, our guest blogger is Rebecca Jacques who is General Manager of AGBA. Below she writes about the objectives of the AGBA Technology Workshops for 2018 and the journey to better goals based advice for clients and advisers.

****

The quest for efficiency, meaning, relevancy and value is one that is felt by all in the Advice Landscape. In an effort to assist our members The Association for Goals Based Advice (AGBA) is not alone in delving deeper into the Technology landscape and in seeking to provide tools and resources to its members. The FPA released a report in November 2017 entitled “Mapping FinTech to the Financial Planning Process”, in which it highlights the significant benefits technology can play in the financial planning process and why financial planners should be exploring options to make their financial planning process more efficient and more engaging for their clients.

The report by the FPA highlights that the average time taken to deliver a comprehensive financial planning solution is 26 hours. The Investment Trends Planner Technology Survey 2017 supports this with their findings indicating that one of the key steps of producing a Statement of Advice is still taking planning practices in excess of 6 hours to produce. However, many of the processes within a comprehensive financial plan require detailed document construction from the inputs gathered from deep client engagement and exploration of a client’s world.

However, in the search to become more efficient and to look at the Technology landscape it is imperative that advice becomes more relevant and of greater value to clients. As Irving so clearly states “Goals are central to a sense of Psychological well-being.” {Irving, Kim, 2012 The financial life well lived: Psychological benefits of financial planning, Australia Asian Accounting, Business and Finance Journal 6(4)}

As part of my role at AGBA I’m having a continual discussion with advisers who are implementing a goals based approach. They all believe that when you add the complexity of a Goals Based Advice process on top of traditional advice steps the problems experienced escalates as the tools and processes they currently use are not specifically designed for a goal centric model. It’s one thing to customise your business process to be more goals centric, however it is a totally different skillset to modify your technology to support it as well.

Regardless of industry, innovation in technology is an expensive pursuit. So it’s somewhat fortunate for us all, that most innovation in tech is funded by large key clients. They set the scope and the budget, provide feedback and change requests. The rest of us wait patiently to see if the innovation is applicable to our business. This is the reality of software development and without it, it’s likely we wouldn’t have many of the great tools we have today.

The challenge for our members is that while goal seeking is a reasonably easy task, many changes members are needing, are akin to open heart surgery to financial planning areas such as risk profiling, asset allocation, portfolio construction and even illustration assumption sets. Add to this, solving the problem of tracking and reporting a portfolio against a client goal.

The AGBA Technology Workshop is the beginning of a series of workshops designed not to just explore possible solutions but to build through partnership the solutions that are required to ensure that the technology that can assist supporters of goals based advice and make their businesses more efficient and importantly, more relevant to their clients. As relevance and value for the client is associated with their knowledge of how they are progressing towards their goals.