Peter Kirk
Peter Kirk

The evolution of financial services is squeezing the middle ground

A core competency of most advisers and accountants in the financial services sector has traditionally revolved around their technical competency. Whilst this is still clearly a required skillset, I believe that most prospective employers simply assume a minimum level of technical competency and are increasingly looking for a broader set of skills.


The difficulty for advisers is that these are typically soft skills in which advisers have had little or no formal training. Few main stream courses prepare advisers for the communication, coaching and selling skills employers are now demanding. Advisers are therefore left with the option of upgrading their skills through on the job training by a mentor or more senior adviser with these skills or finding appropriate short courses that can fill the gap.


So why is it necessary for an adviser to have these skills in the first place?


Whether we like it or not, people’s perceptions and expectations of financial services are changing. This is not surprising as we have seen huge change in many other industries and professions. The way that financial services is delivered to clients is vastly different to what it was five or ten years ago, and I suggest will change drastically in the next five. Our clients are wanting a more engaging and frequent digital experience which they can clearly understand and is completely transparent. More importantly, they want to feel like they are being heard. This means that the adviser needs to have excellent relationship management skills in addition to any technical competency.


Automation, machine learning and artificial intelligence will no longer be a thing like robo advice that advisers are apprehensive about, but rather an essential tool to assist advisers to deliver advice in an efficient and personalised way. I believe that the danger exists for those advisers who are not willing to change and simply believe that they can compete on their technical ability or knowledge of financial markets alone. One only has to look at what has happened via technology changes in the stockbroking space over the last ten years, where far fewer brokers are able to compete for a shrinking piece of the pie.


The interesting piece for me is what happens to those who in the junior ranks or maybe have traditionally been employed in non-client facing roles within accounting and financial planning firms. In Australia we have increasingly seen the larger accounting, banking and now financial planning firms outsource or offshore this work to India or the Philippines. This has now spread to smaller firms as well who are increasingly having to look for efficiency gains to stay competitive. The offshore route is popular due to the low wage cost but in my opinion, will inevitably change as wages rise in these countries. The challenge for this middle group that traditionally sit between the administration team and client facing or relationship advisory team is that the two forces of automation and offshoring are squeezing this group and if nothing else, will open up less opportunities in the future.




So, what is the solution?

I believe that this group also needs to upskill in the same way advisers are being forced to. They need to increasingly have some level of engagement and face time with clients and develop soft skills which will allow them to later transition to a client facing adviser or remain as a paraplanner but perform a dual role which embraces technology to do much of the work they currently perform as well as increased contact with existing clients.  This, in turn, will free up the advisers to engage more in the process of finding new clients and less in the minding role which would then become a joint role, shared with the paraplanner in this scenario.


I would, therefore, urge advisers to consider what soft skills they can add to their resume whilst encouraging businesses to consider changes to their model that encourage more client contact for those currently in non-client facing roles. The value of advice will be judged more on relationship skills and less on product knowledge or individual technical skills than ever before.



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