Topic 4 - FinTech and Digital advice

Question 1

Typical Robo - Advice Client

Answer 1

Simplier Investment Needs
Comfortable with basic investment 
Less than 35
Previously self directed
Wants low cost
Values Independance

Question 2

Typical Full Service Advice Client

Answer 2

More Complex
Wants ability to consult
Personal Financial Stress 
Trusts and feels understood
Values independance and authority

Question 3

Rise of FinTech offers the following advantages

Answer 3

CRM Software to message clients
FP software to research / plan / implementation
Communication Tool
Social Media Benefits

Question 4

Virtual Advisor

Answer 4

Means that you do not have to physically see your clients every year

Question 5

Traits of a successful virtual advisor

Answer 5

Ability to learn new tech
Adaptability
Superior Communication Skills
Desire for more work life balance

Question 6

Tips for going Virtual

Answer 6

Eye contact
Agenda
Preparation
Slow Pace
Use a visual aid
Keep it short

Question 7

Robo-Advisor

Answer 7

Online financial advisory platforms that provide algorithm-based investment management services

Question 8

Benefits of Robo-Advisor

Answer 8

Easy Onboarding
Minimal Investment Requirements
Low fees

Question 9

Concerns for Robo-Advisors

Answer 9

High competition and no differentiation
High marketing and advertising costs
Limited Account growth

Question 10

Robo advisors seem to lag in these areas

Answer 10

• Cant have deeper conversations
• Not responsive to changing goals
• Low minimum fum and simplier account types
• Low investment management
• Research and investment not customised

Question 11

Advisor 2.0 changes the way advisors

Answer 11

• Market themselves
• Interact with clients
• Optimise Processes
• Develop and implement investment strategies

Question 12

Areas to address for Advisor 2.0

Answer 12

Potential Bias
Inertia against change
Fees and account minimums
Legacy processes and platforms

Question 13

Three essential components that clients value most

Answer 13

Performance
Engagement
Trust

Question 14

Contrast the characteristics of ‘typical’ robo-advice versus full-service advice clients

Answer 14

Typical ‘robo-advice’ client:
• Simpler investment needs, fewer assets
• Comfortable with basic, generic advice
• Younger (under 35)
• Often previously self-directed
• Wants low(est) cost
• Values: independence

Typical full-service advice client:
• More complex needs, requires customized planning
• Wants ability to consult with advisor as needed
• Market turmoil, personal financial stress
• Trusts and feels understood by advisor
• Recognizes the benefit of ongoing behavioural and investment guidance
Values:
• Independence: appreciate a collaborative partnership with advisor. (Gens X/Y)
• Authority: appreciate advisor’s direction and expertise. (Baby boomers and older)

Question 15

Outline three potential benefits of virtual advising.

Answer 15

• Saves you and your clients time:
• Work with the right clients, not just those closest to you
• Lower costs

Question 16

Many successful advisors incorporate virtual planning into their practices to support their needs and the needs of their clients, without transitioning to 100% virtual advising. Discuss some of the ‘hybrid’ options you can take advantage of as an advisor who works virtually full or part time:

Answer 16

Renting part-time office space

Meeting in public spaces, adviser’s or client’s home

Tailored approach based on needs and preferences of individual clients