The future of financial planning: A more 'phygital' approach

By Heinrich Punt, General Manager of Intermediaries at Sanlam

Heinrich Punt, General Manager of Intermediaries at Sanlam

It is inevitable that the role of intermediaries within the financial services industry is changing post Covid-19. While the pandemic might not have been the sole trigger, it accelerated the rate at which the intermediated advice space has changed.  

Many of these changes have created positive opportunities for intermediated advice practices that are oriented towards the horizon. Creating future-savvy businesses is not always easy though, and practitioners may face challenges to keep up with the pace. 

These four trends have an impact on intermediaries and their business operations in the financial services industry: 

1.   Succession planning 

Worldwide we have an ageing intermediary force, and this is especially true for independent brokers. All financial planners will retire eventually and, when this time comes, their clients’ needs must continue to be met. For intermediaries who have practised for many years, it is important to look at this as a time of value realisation.  

Younger and older generation intermediaries may have different perspectives and ways of working, but a shared vision around the value of succession planning will result in a seamless transfer. For smaller intermediary practices, it is vital to network with succession planning in mind. This is often overlooked, resulting in the value and legacy of the business being lost. 

2.   Changing knowledge base 

As more intermediaries retire, the industry naturally experiences a diminishing knowledge base. That, coupled with the nature of the financial advice space changing, means that new planners move from the fixed or more technical knowledge of the past to a more client-centric knowledge set. This change holds opportunity for practices that can leverage existing knowledge equity and transform towards future knowledge through new generation financial planners. Intermediary businesses must look at knowledge as a diverse asset to be acquired, retained and developed. 

3.   Economical and regulatory constraints 

Global economic uncertainty, along with changing regulations, brings unique challenges for those in the financial adviser space. While South Africa has a robust regulatory framework within this space, the strained local economy can lead to continued margin pressures. Businesses must see their ability to innovate and plan ahead as a lever. We are entering the new era of digital by design and that requires intermediaries to set clear milestone plans to solve constraints.  

4.   Booming data, business intelligence, and technology 

Technology is by far the biggest challenge and one that will have the greatest impact. Intermediaries need to prepare themselves to be future-ready by being data-led in their practices. 

To do this, advisory practices must move towards a more ‘phygital’ approach, blending the human approach with technology in an intuitive fashion. Being data-led and using the enormous amount of information at their disposal is paramount to evolving with the needs and opportunities within the client base. The ability to develop an engaged client narrative and ensure data-led client engagement and processes are key to transforming this challenge into opportunity. 

Looking to the future 

Gone are the days when a client would see their financial planner once a year to update their planning. Today, clients are far more agile, they want to get the message now, and they want regular contact and engagement. In the modern era, regular, appropriate messaging instils confidence much more than an annual check-in. Confidence is, and always will be, integral in the planning relationship. 

Continuously changing the advice value proposition to address these four key intermediary trends will ensure future relevance. This evolution should also involve associating with the right partners to expand and grow a future-fit advisory practice. Sanlam is one such partner that can empower intermediaries to advise their clients to live with the kind of confidence that makes a real difference. 

To thrive in this year and beyond, intermediaries must become aware of and accept these challenges and leverage the opportunities they present. By adapting and implementing the necessary changes, intermediaries can grow a viable lifetime practice and ensure their client-base is faced with as few intermediary changes as possible.

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