From challenging times come some of the most incredible innovations and scientific breakthroughs. As we all navigate the COVID-19 way of life, we’ve all had to figure out new ways of working, communicating and basically getting stuff done remotely.

 This time of remote working and self-isolation is making way for the complete digital transformation of entire industries. In health, we’ve seen GPs and pharmacists go online to see patients and financial advisory and accounting are no different – as Peter McCarthy said in a recent Startup Daily article, this digital transformation of our sector is something we’ve been talking about for the better part of a decade. 

 “Without face-to-face meetings, advisors have had to think very quickly about how they could better leverage technology to build and maintain their client relationships,” McCarthy said.

The use of online forms – or digital fact finds, tax checklists and onboarding forms – which help advisers digitise the engagement process by eradicating paper to streamline data collection, is up over 300% since December 2019.  Digital signing of documents is up 225%, a direct result of less face-to-face meetings and people working from home.

 On the subject of remote working, as we’ve previously mentioned  a  Federal Government Telework Advisory panel in 2012-13 sought ways to encourage businesses and their employees to embrace “telework”, we were devising strategies to incentivise industry to move the needle on remote working practices. Never did we conceive that a global pandemic such as COVIDCovid-19 would one-day force this change upon people, and do so literally overnight. Back then, technology was improving to help accommodate telework, but today we are truly in a great position to embrace this and there are many signs that technology is delivering.

 Let’s start with the all-important pipes or networks needed to cope with the surge in demand and Australia’s growing appetite for data. In early April the NBN reported that weekly activation numbers had surged to 42,000 premises in consecutive weeks, up from previous averages of 32,000 in the prior 6 months. Peak business hour upstream speeds were reportedly topping out at 1.02Tbps during April, which was a 104% increase over the pre-COVID timeframe. Importantly, it seems that the NBN in Australia is coping reasonably well with the sudden increase in demand. Notwithstanding, upload capacity on the network had to be increased in order to address the demand and further enhancements are likely to be needed. As you’d expect, much of this increase in traffic is related to the huge uptake in video conferencing services, but it seems it is not all about work. For example, the busiest traffic day on the NBN was apparently April 8th which happened to coincide with an online update to the popular video game “Call of Duty”. “Sure boss, I’m really busy here in my home office” as the sound of machine-gun fire echoes in the background. 

 Home video conferencing is the new communications medium of choice and the industry is booming. Zoom and Microsoft Teams are clear winners here. Zoom’s share price is up from $68 in January to over $144. Interesting to note it’s PE ratio is tracking at 1,532. By comparison, the average P/E for the S&P 500 has historically ranged from 13-15.

 Video conferencing is the new communications medium of choice and the industry is booming. Zoom and Microsoft Teams are clear winners here. Zoom’s share price is up from $68 in January to over $144. Interesting to note it’s PE ratio is tracking at 1,532. By comparison, the average P/E for the S&P 500 has historically ranged from 13-15. Other tech companies providing solutions that promote remote working are seeing big lifts in their share prices. Microsoft is up 32% since late March. Atlassian is up 26% in the same timeframe. Slack is up 40%. This is all based on greater uptake of their platforms and related to that, the market’s expectation that this will continue to be a trend long after COVID lockdowns are lifted.

 Closer to home, myprosperity is also seeing a substantial increase in the use of its platform. This trend, however, goes beyond remote working and speaks to the renewed economic uncertainty that is facing clients. Speaking with myprosperity CEO, Stephen Jackel since the beginning of 2020, partner logins to the platform have doubled. Assets added by clients is up 110% and liabilities even higher at 200%, possibly signalling that households are increasingly concerned about debt levels and wanting to get on top of it. Furthermore, the use of Digital Forms and Fact Finds is up 300% and just in the last month, Opportunities have seen an increase of 35%, driven on the back of in-application surveys and a clear signal that clients are seeking help from advisers. 

 Clearly advisers are turning to digital technology to stay connected and their clients not only want it but are in fact demanding it. In our video interview series, myprosperity@home we’ve had the opportunity to speak with numerous advisers on how they are coping in this new remote world. Whilst they have not had a choice, overall the mood is very positive and it seems that being forced into isolation has prompted a rethink on how technology can make a substantial and sustained impact on how the industry will operate. For me personally, I believe the hardship caused by COVID-19 will bring about long-term positive change in the way technology can help bring about better outcomes for advisers and their clients. 

 Early adoption of technology and a strong team culture were just some of the topics discussed when Chris Ridd sat down with Sam Cranange of Cranage Private Wealth in episode eight of the myprosperity @ home series. Managing an office of 30 people and a large portfolio of clients during the market shock of COVID-19 is no simple task, but Sam perseveres forward with a strong team and a positive working culture.

 “We’ve been really lucky having a young, dynamic team of people who have a really strong work ethic.” Sam tells Chris as the two start to discuss how Sam’s been coping during these tough times. What’s been his saving grace has been the strong work ethic of the entire office, as well as having a huge amount of trust for his team. For the past few years Sam has also been working a few days from home, making the transition to lockdown conditions easy. In adapting to this the team had become fluent in doing meetings via Zoom, so much so that Sam had been seeding this technology into the way he serviced clients. 

 Sam has been utilising features in the myprosperity portal such as document signing and digital onboarding surveys for some time now, asserting that they dramatically increased business efficiencies and saved time handling client paperwork. This digital shift in his business that evidently everyone is now having to adopt he feels will be the new business-as-usual. For Sam and his business the digital transition has unearthed some truths about the way he services clients that he cannot not see. 

 Outside of the tech world, Sam’s managed to maintain a healthy body and mind during this time by taking the time to enjoy surfing. While he acknowledges he’s lucky enough to live down in Torquay and have access to the beach, he encourages his whole team to take that time to clear their mind so they’re not feeling overwhelmed by the large volume of work coming through at this time. 

 You can watch the full episode below.

Here’s what’s happened in advisory: 

1. Gift or loan? The AFR this week published a column urging parents to think very carefully before giving adult children financial help. As parents, we all want to help our children in whatever way we reasonably can. However, Louise Biti warns before you write that cheque, consider the impact on age pension entitlements as well as current or future aged care needs. There’s a great breakdown of the financial effects of helping your children here. 

2. Early super access – we’ve been banging on about it for weeks now but super funds CIOs say funds are liquid enough to handle member switching and early withdrawals. AustralianSuper’s Mark Delaney said stress testing had been performed on “much bigger numbers” than was being anticipated. More here. 

3. Dividends deferred. The banks are deferring dividend decisions after their profits fell more than 50 per cent off the back of COVID-19. More here. 

4. Online learning for advisers. The Adviser has launched a new online learning centre for brokers this week. The e-learning platform will help brokers earn CPD points and continue professional development remotely.

5. Long read for your weekend. Professional Planner has put together an opinion piece analysing why dismantling reforms may be the only option for the future of the advisory sector. 

Bonus item: This week on myprosperity@home Chris Ridd sat down with Andy Fenton of Fenton Financial to discuss how he and his advisory business are coping, the conversation spanned several topics including technology, Instagram TV, client communication and a summary of how he’s been managing his client’s finances amid this crisis. Watch it here.

When Chris Ridd sat down to speak with Andy Fenton of Fenton Financial to discuss how he and his advisory business are coping, the conversation spanned several topics including  technology, Instagram TV, client communication and a summary of how he’s been managing his client’s finances amid this crisis. 

Andy begins by telling Chris how busy Fenton Financial was prior to the market shock of COVID-19. “I’d be lying if I said I wasn’t working harder than I’ve ever worked before.” commented Andy, as he went on to explain that when the markets first crashed he rushed to put together communications for his clients, when another shock hit the market. 

Andy felt the situation was evolving so quickly that the only way to get ahead was to get on top of it. He decided to do this by developing a cohervice series of platforms that communicated directly with his clients, giving them valuable peace-of-mind and updates. This approach was made up of Instagram TV, Zoom for webinars and meetings, live video streaming and Facebook groups, as Andy felt that he needed to go to where people were already communicating, not bringing them somewhere new to communicate. 

“Client’s were wondering what was going on, what legislation was in place, what did the stimulus’ mean, so we needed to give practical and calm guidance.” Andy and his team developed their own contingency plan for their business, figuring out what their 5 stages of planning were and voicing that to their clients so they could prepare their own businesses with similar planning. 

For the past two years Andy has been developing a new service that’s a membership-based platform which will give access to DIY services, act as a single source of truth for all financial data and provide collaborative technologies so that clients can be guided through it at all times. 

“We’re going into that space now where it’s how you use technology partners that communicate with other technologies, it’s about how you bring them together and I honestly believe whoever does that really well will start to own big niches in the market.”

You can watch the full episode here

As some of you may know, in addition to being a director of myprosperity, I’ve also been a passionate user of the software since 2015 when my adviser/accountant first introduced me to the platform. My enthusiasm for the potential of myprosperity, and its ability to help advisers work more effectively with their clients, is what drove me to contact the founder, Peter McCarthy. And I guess as they say in the classics, the rest is history.

So as an informed and regular user of the software I take notice of the improvements that have been made over time to the client portal. Last Sunday, I spent a good chunk of the afternoon updating everything in my portal to ensure my adviser had all the latest information on my financial position. Going through this exercise prompted me to note down some of the cool feature improvements that have been made by the development team over recent months. It also made me wonder whether many of our partners and their clients have also noticed the same improvements that I have.

So I thought I would highlight my top 6 most improved features in the software. Here they are…

1. Ability to record more detail on Wealth items
The ability to track information on wealth items has been improved and expanded. For items such as property, vehicles and shares, myprosperity has always used automated data feeds (as part of the Pro subscription) to track and record the latest value of these items. This is awesome as the system does all the work for you in keeping track of your financial position and in calculating your net worth. However for other investments that require manual tracking, such as private equity or a business entity, the information you could capture was generally quite limited. Basically the system only allowed you to enter an overall valuation of an investment without allowing a whole lot of other detail to be recorded. Well all that’s changed. As an example, with Private Equity investments, you can now enter a cost history for that investment and record specific valuation dates, which is ideal if you want to track the performance of such investments over time.

2. Historical valuation tracking
So that’s all fine moving forward, but what about retrospectively getting a better historical view on these types of investments? No problem. Myprosperty now gives you the option of uploading a CSV file with customisable historical performance data. There is a prefilled template that you can modify and upload against a particular item to show how that asset has performed over a specified period of time. Previously you were stuck with whatever information had been initially entered into the system and at times this might be incorrect and you had no way to fix it. I know that this has been a bug bear with some advisers where downward spikes in a clients wealth history might be erroneously and permanently recorded in the platform. Now you can make sure the system provides a truly accurate reflection of investment performance and showing the right trajectory, and that’s hopefully upwards.

3. Cash Flow and tax tagging
Whilst I’m not one of those clients that meticulously tracks every dollar spent to a strict budget, I do like to keep an eye on where my money is going and identifying where I can save a few dollars. The great thing about myprosperity’s “Cashflow” feature is that transactions from ALL your bank accounts are automatically loaded into the platform. In my situation, and demonstrate how powerful this can be, I’ll pinpoint one example. My family is a big user of Uber. We have 2 Uber accounts across 2 credit cards as well as being occasional customers of Uber Eats. Without myprosperity, if I wanted to work out how much I spend on Uber, that exercise would be bordering on a low level forensic accounting exercise. With myprosperity, by searching on the term “Uber” and interrogating all transactions, regardless of card or account, within seconds I was able to determine that this tax year alone we’ve spent $2,712 on that service. Note to self… this needs to change next FY!!!

On the issue of tagging transactions to an expense “category”, you may recall that the move to a new Yodlee (bank feed) API back in 2018 proved a challenging exercise but it seems all that pain was worth it. The accuracy of tagging to categories in myprosperity from what I can see is way more accurate, and the process of tagging vastly quicker. As an example I went through over 170 transactions in one particular expense category in just a few minutes. I actually timed it over that entire category and it consistently takes just 3 seconds to load 10 transactions so I was easily able to review and change over 100 transactions in a couple of minutes. I think it took me just under 2 hours to go through an entire financial year of transactions, including tagging to a category and mapping to specific tax tags that I had customised in the system. If you want your clients to find transactions for tax purposes that they would otherwise have to search receipts or banks statements for, this feature makes that task way easier.

4. Mobile app
I know this is not a new thing, but if you haven’t checked out the myprosperity mobile app for a while, you really should. Previous versions were busy and not representative of the type of leading mobile app design that you or your clients may be accustomed to with other leading tech brands. Last year, and I’ve forgotten the exact timing, but myprosperity launched a new look mobile app and it is a massive improvement. Screen layouts, font, icons, charts and the entire look and feel of the app is clean, crisp and frankly, beautiful. If you are on the road a lot, as most of us are, this myprosperity app is ideal for your clients to have their financial world at their fingertips. It’s even better for the adviser if you are signed up on the Mobile First agreement and have the app branded with your logo and colours. Again, worth checking out if you haven’t seen the app recently.

5. Comprehensive Cashflow Report
One of the advantages for advisers in using myprosperity is the ability to generate great financial reports for clients using up to date information directly from the myprosperity client portal. One of the reports that was added some time back was the Comprehensive Cashflow Report. The name actually doesn’t do justice to just how awesome this report is. It basically pulls together goals, cumulative expenditure, net (asset/liability) position, current year cash flow, budget Vs expenditure all into one report. My version of this report is actually 15 pages long and generated automatically from the system in a beautiful layout, branded with my advisers logo, and all done within seconds. Before myprosperity a report like this would take an adviser hours and hours to prepare and would simply not be worth the time and effort based on the return. This is such an incredibly valuable resource and I wonder how many advisers are actually using this with their clients.

6. Document storage
My final most improved feature is simply the document repository under “Docs”. The structure of this portal means you can access documents logically from the various folders. The “All Files” section is where all documents that you have uploaded into the portal can be accessed and where you can search for a specific document. By the way, this works great on the mobile app and is a real lifesaver if you are on the fly and need to get access to any document from the portal.

You have 4 master folders of “My Uploads”, “My Tax”, “My Advice” and “Other Docs” where specific documents can be stored against each of those categories. This is great for an adviser to proactively load tax documents from prior years so clients can simply go to the portal rather than hassling their adviser for a tax return lodged 3 years ago. It’s all there.

What I love is the ability to set up customised subfolders under “Other Docs” so it is easy to find stuff related to specific categories. I noted on Sunday that I now have just over 100 documents in the portal so if anything was to happen to me it’s all in one place, right down to source documentation and correspondence that might be vitally important in understanding the state of my finances. Best of all for advisers is that the Docs feature is available for Starter accounts, so that’s a free service to offer all clients.

So there you have it. My top 6 most improved features in myprosperity, and I haven’t even mentioned digital doc signing and form fill. Hopefully you are reading this and saying, “yeah, none of that is new… I knew about all that”. But, if you are reading this and not aware of some of the improvements I’ve highlighted in this blog then it’s probably time to go back and take a closer look at the platform and get your clients on board. They’ll thank you for it.