Facetime vs. screen time: How financial advice firms can strike the right balance

As you know, the financial services sector is one of age-old traditions, with emphasis placed on the value of face-to-face communication. For the last 20 years, Independent Financial Advisors (IFAs) have built relationships and trust with both their clients and insurance companies through meetings, events and networking. That was, until a global pandemic made that impossible...

A pandemic of disruption

The COVID-19 pandemic disrupted services across the financial sector, causing an unprecedented pause in in-person communications with potentially devastating consequences for many. However, as stated in an article published earlier this year by the Financial Times, “the speed of digital transformation in financial advice is accelerating” - there has never been a better time to adapt.

Front line sales distribution was hit because insurance companies couldn’t see IFAs, and IFAs couldn’t see their clients. To continue providing scalable, future-proof services, adopting innovative technology was inevitable. Yet, this seemingly sterile, unfamiliar environment was not something traditional IFAs welcomed with open arms. Previously, client meetings could take place in a comfortable, almost informal capacity that strengthened investor relationships and built trust. When the restrictions of the pandemic hit, this informal, office-based chat had to be done via a computer screen, or not at all.

Adapting to transformational technology for good?

This is where insurance companies stepped in. In order to assist IFAs, they offered themselves up in an almost consultancy capacity for training and familiarisation services with platforms such as Zoom and Microsoft Teams.

In doing so, they spotted the potential to build stronger relationships with IFAs in the future and, therefore, the ability to put their products in front of end clients. Insurance companies provided lots of virtual training on how IFAs could manage their business during the pandemic, spotting the opportunity for cheaper costs in the future. Regional sales managers for insurance companies could talk to several IFAs over one webinar, rather than arranging a costly conference or travelling to meet with them all individually, for example.

However, I believe there is still a need for the human touch. While this urgent adoption of tech has proven you can strike a suitable balance, you can never really use it to entirely substitute face-to-face meetings. Clients of IFAs need at least an initial meeting before committing to an investment, particularly on a larger scale. There is a definite discomfort in conducting financial reviews and sharing sensitive information in a digital environment, as well as the unrealistic expectations of digitisation by older clients who may not be familiar with, or trusting of, digital platforms.

In my opinion, it’s obvious that innovative tech solutions can make processes and operations much more efficient and easier, but you will never really be able to deliver trust-building charisma via a screen. Moving forward, a combination of both will work for all parties. The pandemic has taught us that you can be equally as productive in a digital world, and existing relationships can continue as they did previously.

Looking to the future

In terms of preparation for the future, there’s one stark lesson to be learned from the pandemic, and that is that firms must be digitally prepared. Amid the calamity and logistical nightmares that ensued when insurance companies needed to relocate their staff and administer new IT equipment, it was very much down to the survival of the digitally fittest.

IFAs who couldn’t get hold of their usual contacts due to the relocation chaos immediately went elsewhere, while those who already had a flexible approach to working were ready and waiting with laptops.

So, where do we go from here? What does the future look like for firms in the financial advice sector? Have you thought about how you're going to strike the right balance?