Data is the new oil

 

In 2006, the phrase “data is the new oil” was coined by British data analyst and architect of the Tesco Clubcard, Clive Humby. This association between data and oil was based firstly on its’ lucrative value as a tool for amplifying revenue opportunities and secondly, the specific need for it to be ‘refined’ in order to reveal these opportunities. Big shifts in data science, privacy, financial services and a global pandemic later, the essence of this quote still rings true in 2021 with a few key changes to how we think about customer data insights.

Unlike oil, data is unlimited in both its quantity and its capacity to do both harm and benefit. The infamous case of Facebook and Cambridge Analytica’s data privacy scandal of 2016 immediately comes to mind. This was something of an “oil spill” that happens when data is not managed ethically. Despite the serious implications of that case, it did force us all to consider not only our duties to protect client data, but also the importance it holds for clients, accountants and advisers alike in creating new opportunities for growth.

To bring some insight into how data can be used to extend client relationships, I sat down with Inspired Money’s Director and Co-founder, Conrad Francis. With almost 25 years of experience in banking and finance, Conrad leads this boutique financial planning and advisory consultancy with a focus on innovative business solutions. I first wanted to know more about Inspired Money’s approach to obtaining and using client data in its practices. “We mainly use the myprosperity, or as we call it the Inspired Money, Wealth Portal,” explained Conrad. Inspired Money has partnered with myprosperity for five years now, managing over 800 client portfolios encompassing financial planning, asset protection, estate planning, investment reviews, life insurance, retirement planning, shares/funds investment and wealth creation through their custom myprosperity wealth platform. Conrad also mentioned the technology Inspired Money uses alongside myprosperity to evaluate client data, “We recently started using Pardot via Salesforce for our newsletters and marketing and that is also starting to give us some great data on our prospects and clients.”

Central to building deeper client relationships is the sense that clients feel understood by their financial adviser or accountant. It’s through the use of data that this can be achieved as Conrad explained, reflecting on his recent experience with a new client. “They happened to be an owner of an Accounting business. Having taken them through our usual onboarding process via the Inspired Money Wealth Portal (powered by myprosperity), we were able to overlay some simple assumptions prior to the first meeting and by the time we had the first meeting with the client, using their data and a few assumptions we showed them that they were on track to retire in 19 years. However, this assumed they were confident in their ability to generate their income for that period and that they were well enough to continue to work for that period… which exposed gaps in their personal risk plan. Upon further investigation, they expressed that they wanted to retire 9 years earlier than this. We were able to show them the impact of that decision via the “Goals” section in the portal which exposed an investment plan gap.” This is a great example of data being used to create value for clients whilst providing them with options. “The client’s decision was then very simple: work with an adviser or accept the gaps, a trade-off conversation that was made easier with the wealth portal. Furthermore, we are now in conversations with that Accountant about merging businesses because the benefit is something they believe in so much.”

Getting a clear picture of your clients’ financial world can be extremely time-consuming. Small mistakes in data recording can quickly escalate into bigger problems, so it’s essential that the correct tools are used to accurately collect data and alert early when anomalies and issues arise. Forging those data-led processes to understand clients is made simple through the right technology. For example, through powerful live data feeds, myprosperity’s new Midwinter AdviceOS integration securely consolidates client information across the two platforms, showing only the most accurate and up to date details. This maximises efficiencies and eliminates double handling of data, which in turn minimises the risk of human error. Advisers also have the ability to identify new client opportunities through myprosperity’s client surveys – a great way to check-in with clients about their current financial status. It generates conversations about additional services, creating further value for clients.

When asked what advice he would give to firms who are lagging behind and using manual data gathering tactics, Conrad had this to say, “Simply stop it. You are not serving yourselves, nor your clients by maintaining the manual processes – and you are potentially destroying the value of your business in the process.” I couldn’t agree more with this. If it’s ‘mined’ using the right tools, data is the single most important commodity for the innovative advisory or accounting firm’s decision-making. The modern client expects their adviser to be backing these crucial decisions with solid numbers. This being said, it can be tough to know where to begin with data or how to take it to the next level and make your systems work for you. If you’re interested in having a chat about data solutions for your business, get in touch with us today.

 

 

Karolina Kuszyk

Head of Wealth

Karolina brings over 14 years experience in the Tech industry. Her previous role as a Field Partner Manager at MYOB, paved her way into the FinTech space. She joined myprosperity as employee number 8 and has played an instrumental role in driving growth since.

Meet myprosperity’s newest addition to the team, CPO Josh Centner

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We’re super excited to introduce the newest addition to our award-winning team – joining us this week is Chief Product Officer, Josh Centner. In an awesome introduction we gleaned some insights into his career thus far, and what drove his passion for product innovation and agile management.

Josh’s tech career began after an unexpected series of events, starting out as an accountant at a mid-tier firm back in 2008. “Three months into this role the GFC hit and my entire team was made redundant,” Josh reflects, “Luckily I managed to land an admin role at life insurance provider, AIA. One week into the role I figured out how to automate my job, unfortunately, this required coding – something I didn’t know how to do. Over the next two weeks, I taught myself how to code, working well past midnight to get the job done.” This impressive achievement led to the entire team using Josh’s solution which cut process times by up to 90%. A week later he was promoted to Business Analyst, launching him into his career in technology.

After six months with AIA, Josh built a prototype app to better help customers manage their insurance and claims in his spare time. This led to him being appointed as the Australian Representative for the global AIA innovation team, “This was when I properly fell in love with product management and innovation,” he reflects.

His next major challenge began in late 2013 when he joined Elabor8, an agile management consultancy. After consulting for two years across multiple organisations including IOOF, NAB, ANZ, CarSales and Xero, Josh was invited to take on the role of Head of Product and Design Services. In this new position, he grew a team of product managers, experience designers and customer researchers. “Learning at Elabor8 was like drinking from a fire hose,” says Josh, “Every day a new person would join with top tier experience eager to share their knowledge.”

After four years with Elabor8, Josh took the leap into his most recent past as Head of Product and Delivery for HR software company PageUp, where he immediately got to work delivering on the vision of what an ideal product innovation team and its processes should look like. “This position rolled up three teams into one; product owners, product strategy and agile delivery management. My first task was to help the organisation transform from a sales-led to a product-led company.” Scaling emerging startups into successful organisations is a passion for Josh, his latest read being ‘Platform Scale’ by Sangeet Paul Choudary. “If you are interested in tech startups and SaaS and potentially thinking of doing one yourself, this book is a must-read.”

Beginning his journey with us this week, Josh expressed his excitement to join the myprosperity team, “I love working with a product that affects everyone. Something that has the potential to improve the lives of every single household in Australia and help people achieve their own personal dreams.” Speaking of dreams, his aspirations for the platform and the company show how keen Josh is to get going. Some of his top goals for the next three months include;

Josh Centner headshot

  1. Defining an inspirational, long-term product strategy.
  2. Building a cutting-edge product innovation process and have it up and running.
  3. Having a large number of our users understand why they use myprosperity, what they are trying to achieve and how they believe we could make the wealth portal better.

“Pete told me of his inspiring vision for the product and the all-important why behind what myprosperity does – ‘To help every household live their best possible financial life’. I was hooked immediately,” Josh said.

As someone who wears many hats, “dad” included, Josh attributes his ability to stay sane over last year’s lockdown to his two young sons, aged two and five. They kept him busy as a cardboard castle and rocket engineer (from all the food delivery boxes) and bicycle riding coach. Josh added, “We went on heaps of walks on the beach once we could get out of the house.”

When it comes to personal prosperity, Josh couldn’t have summed it up better, “It really depends on the person. Prosperity is a personal state of mind where you are achieving your own financial goals. Whether that’s going on holiday, buying a house or saving for retirement, prosperity is when you are comfortable in how you are tracking towards those goals.” As a collaborative wealth platform that works to bring clients closer to their financial goals, whatever they may be, we couldn’t agree more.

Could Artificial Intelligence be the next game-changer in financial services?

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In an early glimpse at some of the proposed spending commitments in this week’s federal budget, there was mention of the government committing $124.1 million to help build Australia’s capability in Artificial Intelligence (AI). This will include a National Artificial Intelligence Centre and a network of AI and digital capability centres whose purpose will be to increase the adoption of AI technologies by businesses. At this stage the details on what all this means for businesses and the broader economy are sketchy and I look forward to seeing more analysis of this investment and expected output.

Along with a further $1.1B budgeted to boost Australia’s digital strategy, this growing focus on AI in Australia is a good sign that the government acknowledges the impact that this ever-evolving technology can have across many sectors of the economy. According to PwC’s 22nd Annual Global CEO Survey from 2019, AI will add US$15.7 trillion to global GDP by 2030, which is more than the current output of China and India combined.

So exactly what is AI and why does it matter to our industry? In a recent conversation with Chris Ridd, Director of myprosperity and former MD of Xero he recounted, “A number of years ago, Rod Drury of Xero, dedicated almost an entire keynote at the annual Xerocon event to the topic of artificial intelligence in the accounting software space.” He went on to say “In 2017, Drury declared that the amount of data that Xero was processing across millions of customers, was giving rise to opportunities to use Artificial Intelligence (AI) and Machine Learning (ML) to automate many tasks, starting with the coding of transactions.” Often the terms AI and ML are used interchangeably, but there is a distinction. Artificial intelligence is a technology that enables a machine to simulate human behaviour. Machine learning is a subset of AI which allows a machine to automatically learn from past data without programming explicitly. Machine learning generally requires large amounts of data for trends and relationships between data sets and outcomes to be accurately modelled and improved with repeated application. Ultimately, the goal of AI is to make a smart computer system behave like humans to solve complex problems. I like to refer to this as “getting the software to do the heavy lifting”, and thus replacing manual tasks to allow, in this case, the advisor to focus on developing deeper client relationships. Things that machines can’t do…yet.

In 2019, a study called “AI & its potential to revolutionise the accounting industry” was produced in conjunction with Singapore Management University School of Accountancy. Later published by CPA Australia, it revealed some good insights into the likely uptake of AI in the accounting industry. The report discussed how AI and ML can be implemented in accounting projects involving fraud detection, forecasting and prediction (of cash flows, inventory, revenue), rules identification to improve process automation, full-scale audits (without the need for sampling) and more. See the full report here and page 9 for the list of applications.

There have been several software providers in the accounting and advice space that have started to deliver some very practical applications of this technology. In the legal industry, Josef Legal built an advanced platform with AI capabilities to automate document drafting, configure bots for client engagement, and automate manual workflows in a practice. In the advice space, Nod has automated documents for advice planning to help streamline the preparation of an SOA. A close partner to myprosperity, BGL, announced SmartDocs last year, an AI-powered document reader that extracts data from images and PDFs (including scanned documents and photos) and converts the data into digital information. I particularly like how FYI Docs, amongst numerous process automation tools, has added a neat and really helpful feature known as “negative email alert”. A “sentiment detector” checks the text in all emails and creates an automatic alert for any inbound client email that is highly likely to have a negative sentiment. The process also creates a task that is assigned to the relevant client manager to review the email. That’s cool.

Further examples of AI in accounting include Xero’s acquisition of Hubdoc a few years ago, making it possible for the accounting software to automatically extract key information from receipts, invoices and bills, greatly reducing manual data entry. There is also a slew of chatbots available for advisers to use (e.g. FlowXO) that essentially allows someone with no coding skills to get set up and operate online quickly. At myprosperity, we’ve started to delve into the world of AI in our client portal technology in the use of digital forms. We are now starting to automate parts of the analysis/build of these forms to fast-track turnaround time for partners that want to take their customised paper-based form and turn it into a great digital experience for their clients.

So what does all this mean for you? If you had the chance to watch our recent WowCrowd interview with Damien Waller, i-Select founder and serial entrepreneur, he commented that “Virtually all my businesses have significant AI built into them. (If I was an adviser) I’d be looking at every AI-based product that I could plug into my practice because if I don’t do it my competitors will be doing it right now.” He makes a really good point. The accounting industry needs to recognise that AI technologies such as ML, are enabling tools rather than adversaries out to steal jobs. As the CPA AI report articulated only too well… “Rather than replace human accountants, AI and ML become colleagues to their human counterparts and help to get the job done in the most effective and best way possible.”

 

Stephen Jäckel

Chief Technical Officer at myprosperity

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Stephen is the technical leader behind the myprosperity platform. After graduating with a Bachelor of Software Engineering with Honours in Artificial Intelligence, Stephen was development manager at Carsales.com.au for nearly 5 years. With over 10 years of industry experience, Stephen hand-picked the team to build and grow the myprosperity platform.

myprosperity x Midwinter: A tech stack that does the heavy-lifting for you

 

As the demand for quality financial advice grows, we find ourselves entering a new era of financial planning. One where advisers must be engaged and embedded into the financial lives of their clients, providing active advice that not only builds a client’s wealth for the future but helps them enjoy it in the present.

So how do we find this time to dive deeper into each client portfolio and create this personalised advice? The most successful advisers will already know the importance of a comprehensive and synchronised tech stack that cuts administration time and brings forth valuable insights.

At myprosperity, we always strive to bring our partners the best, most intuitive integrations and we are thrilled to announce our collaboration with financial planning software company, Midwinter. Advisers can now pull client data including personal details, entities, associates, relationships, assets, and liabilities from myprosperity into Midwinter’s financial planning solution, AdviceOS with the click of a button.

Clients’ assets and liabilities are kept up to date in myprosperity with live data feeds, and this data is automatically pulled into AdviceOS daily, providing a ‘whole of wealth’ approach to client management and facilitating a better experience for clients.

In CPA Australia’s report earlier this year, the in-depth qualitative research with 20 consumers and SMEs, along with quantitative analysis involving 1,244 consumers and 815 SMEs revealed the need for more client-centric advice models. With the combined power of myprosperity and Midwinter, advisers can leverage data to provide this enhanced client-focused experience, ultimately saving time, lowering the risk of error and facilitating better compliance practices.

Team members, entities and balance sheets will also feed into Midwinter from myprosperity, allowing advisers to provide holistic advice with consolidated data and uncover new revenue opportunities.

If you’d like to know more about our platform and how we can enhance your practice, book a demo today.

Author: Lauren Main

Silver lining in Financial Advice Landscape report

 

In mid-April, Adviser Ratings released its 2020 Advice Landscape Report and some findings were no surprise in the wake of the Hayne Royal Commission and Covid-19. The findings from over 1500 survey respondents between November 2020 to February 2021 paints a dark picture about the state of the financial advice industry but also points to some great opportunities for the sector.

The AFR reported on the exodus of financial advisers from the industry, with the total number of advisers remaining at 50% lower than before the Royal Commission in 2018. Specifically, adviser numbers are expected to drop to about 17,000 by the end of 2021 and 13,000 by the end of 2023 – well below its initial estimate of 15,000 less than two years ago. Not only have we seen 8,000+ advisers leave the industry in the past two years but a further 6,000 have switched licensees. The report points to the FASEA exam requirements that many advisers have been unwilling to meet, and noted that two in five advisers are yet to sit the exam, suggesting further declines in adviser numbers are likely. The other major factor has been the exit of the Big 4 banks from the wealth advice market. Likewise, AMP and IOOF have been reducing the number of licenced advice firms.

You’d be forgiven for assuming that the industry is in a total state of flux in reading some of the findings, but looking behind the numbers reveals a potentially brighter picture and a clear opportunity for those remaining in the industry. For starters, the rate of adviser exits were markedly lower in the second half of 2020, and according to the report by Adviser Ratings, have slowed even further so far in 2021. There is also an unprecedented demand for advice, which we at myprosperity have maintained a consistent narrative in our blog series. According to the Adviser Ratings report, 30% of the unadvised consumers indicated that they will require services from an adviser in the future which is consistent with previous reports from PwC and ING about the future of advice. Also, according to an article by IFA last week, many of the advisers leaving the industry were reported to be salaried bank advisers, accountants who couldn’t operate without exemptions, or the small business end of advice ($200-400k) that had significant grandfathered revenue that was unable to be converted to a fee-for-service model.

There is no doubt the industry is going through a significant shakeout but history shows that any industry that goes through this type of disruption will also see big opportunities for those that can quickly adapt. We remain confident that with reduced supply, and demand still buoyant, there has never been a better opportunity in the financial advice industry. The shakeout will also mean that market forces will drive much-needed change to seek efficiencies. Technology will play a key role. In the latest WowCrowd episode with Damien Waller, i-Select founder and entrepreneur, he openly described the state of technology in the advice sector as an ‘abomination’. In his view, and we agree, greater use of technology to drive efficiencies is much needed, but also the use of AI to automate functions and ensure the adviser can operate with scale.

Leaning on technology to do the heavy lifting is going to be critically important over the next five years. Those remaining in advice have a unique opportunity to capitalise on the disruption that is occurring right now and achieve great success. That success lies in the adoption of technology such as the myprosperity client portal, to help deliver an improved customer experience and business efficiencies.

Author: Chris Ridd