COVID-19 forced a massive work-from-home push in China earlier this year. In Australia around a third of employees already regularly worked from home in 2019, according to Australian Bureau of Statistics (ABS) data, and this proportion is set to increase significantly as efforts to curb the spread of the virus get into full swing.
As the situation continues to evolve in Australia, more and more workers are being required to work remotely, testing the capabilities of employers and businesses to operate with a distributed workforce. Financial advice practices are not immune from the same influences, but just how well equipped are they to deal with what is becoming a new normal?
According to Netwealth’s AdviceTech Research Report 2019, produced in collaboration with CoreData, more than three-quarters of advice businesses are technologically set up for employees to work from home, generally using cloud-hosted document/file storage and sharing technology (75.9 per cent) and cloud-hosted email or internal communication service (76.5 per cent).
Working from home is one thing, but running virtual client meetings – to onboard new clients, for example, or conduct review meetings for existing clients – is another matter because it relies on the client being set up to participate as much as the adviser. However, virtual meeting tools generally have web-based options that allow clients to join for free, as guests.
More than half (51.2 per cent) of advice businesses currently use a virtual online meeting tool, most commonly Zoom, Skype and GoToMeeting. Advice practices routinely use virtual meeting tools to interact with clients living in rural or remote areas, or sometimes in simply in accordance with a client’s preference not to have to come into the adviser’s office every time they need to meet.
The Netwealth report found that in 2019 a third (33.3 per cent) of advice firms said they planned to use a virtual meeting tool within the next 24 months, meaning that as many as 10 out of every 12 (84.5 per cent) advice businesses could be equipped to run virtual meetings. However, that implementation timeframe could be compressed significantly due to the impact of COVID-19 and the ongoing necessity to maintain contact with clients.
While a significant section of the advice industry has technologies in place to deal with their staff working at home, technology to improve efficiency is another issue. The Netwealth report found that only around a third (34.8 per cent) of businesses currently use a digital signature tool, but almost half (45.4 per cent) were planning to implement in the coming 24 months.
Only around one in eight (13.7 per cent) advice firms currently use a digital workflow and integration tool. Two in five businesses (40.2 per cent) said it was something to implement in the next 24 months.
Even before the outbreak of COVID-19, so-called successful advicetech businesses (SATBs) had a higher uptake of technology than the average advice business, and recognised the importance and benefits of running tools like virtual meetings.
SATBs most commonly operate under their own Australian financial services license (AFSL) or under an external AFSL not owned by any major institution. The majority of them are managed by a Gen X or Gen Y individual, with an average age of 43.
These advice businesses that are faster adopters of technology tend to have more revenue growth, are more likely to grow their client base in the next 12 months with and have clients with larger average portfolio balances (more than $500,000).
In a world of social distancing, technologies like online meeting and digital signature tools will become even more important to advice businesses. A possible silver lining to this pandemic is that it may force advice businesses to implement more or speed up the implementation of technological solutions within their practice – with benefits for the business and clients alike.
