I had the pleasure to chat with Prashant Nagarajan from Finnacle about how he built his practice, his vision and ultimately leveraging technology to drive efficiencies and make advice accessible for his clients.

Prashant and Finnacle co-Founder Daniel Thompson started their journey together back in 2012 when they were both working for ANZ. As they climbed the corporate ladder and dealt with more complex clients, they realised that most of the people that were reaching out to them were over the age of 60 and wanting to know how their money could stretch for them to retire in two to three years. After four years of the same conversations day in day out, predominantly discussing retirement plans, Prashant felt his job was becoming quite mundane. “I felt my job was becoming a one-trick pony,” he reflected, “there was a clear pattern here, these people should have reached out to us 20 to 30 years ago!”

As Prashant started to think about the younger demographic of 30-year-olds, it was clear that price was a barrier. Interestingly, during the same time, Prashant was about to purchase his first property and found that the opinions of the mortgage brokers, real estate agents and his friends were all varied and confusing. He realised that this is exactly the same problem most 30-year-olds are having.

Prashant started researching and surveying what aspirations 25 to 45-year-olds had and it was predominantly in buying their first home or investment property. Prashant ended up leaving ANZ and joining a financial planning company to learn how to weave property and financial planning concepts together. After two years, in late 2017 Prashant started his new practice, Finnacle. “I had an intuition, it’s now or never”.

The first 12 months were challenging, as Prashant spent a lot of his time surveying the younger demographic in what they actually wanted. There was no concrete data on this previously, so it was not surprising that he uncovered 95% of 25 to 45-year-olds did not have a clear understanding of what financial planners do. Most of the surveys uncovered the pain points around purchasing an investment property or starting a family. No one at all mentioned super or insurances, all the traditional aspects of financial planning. The next challenge was to consider different price points and after much trial and error, Prashant found the sweet spot subscription fee model that works well for his business and the younger demographic.

In the first year of the business, Prashant used paid advertising via Facebook to target his audience. “We wanted to fail fast if it didn’t work, but luckily for us, it did bring in the lead generation,” says Prashant. After the first two years, he was able to switch off the paid advertising and grow his team to six. “The business has really grown in the last 12 months. Time is the initial investment that you need to make to see a return on investment”.

For Prashant, investing in technology like his branded wealth portal has really saved time and brought incredible efficiencies into his practice. “As soon as our clients sign off on the service agreement they are onboarded onto myprosperity and understand its a tool we are going to use with them on our journey together”. Prashant initially thought there may be some resistance from new clients to the portal, however, any concerns were easily answered and there is absolutely no pushback moving forward. “It’s all in your positioning and portraying trust with the client,” he says, adding, “The level of clarity and understanding that goes into a client is significantly higher and being able to have visibility of all of your finances and goals in one place is very powerful.” Prashant has had many clients provide positive feedback about his portal which has complimented his outstanding service and in turn has increased word of mouth referrals. “Having data at our fingertips means we can also be more proactive with clients.”

Reflecting on the last three years since Finnacle first began, Prashant mentions the biggest thing he has learnt is the division of labour and how much you should value your time. “As much as we can outsource back-office work, technology implemented properly can incrementally save you time and money,” he continues, “In particular, we could never deliver our services at our current price, without tools like myprosperity. In my opinion, most businesses will not be sustainable without technology. It’s a matter of ‘when’ not ‘if’.”

Last week I had the pleasure of sitting down and discussing all things advice related with Vincent O’Neill from Stanford Brown. Between 2009 and 2015, Stanford Brown had built three main pillars which consisted of Insurances, Private Wealth Investment and a Corporate Super arm which evolved into a Benefits Advisory arm. Vincent’s journey began with the business 14 years ago in a Client Services Administrator role. During this time he got to experience the coal face of the business, which had only 15 staff. From there, the business was built very much on a personalised service. “Early on we realised that it was the personalised service and going above and beyond for our clients that is what made the difference,” Vincent reflected.

The challenge often is that when firms grow and scale, implementing more processes and procedures, this personalised service can start to get lost. During the last seven years, Vincent headed up the Private Wealth division during its large growth phase. He says, “I was keen to make sure that as our adviser’s numbers grew and client base grew and that we maintained that personalised approach with our clients.” Vincent mentions that each adviser has a strict number of clients they are to handle, so that they can remain proactive not reactive. In addition to this, all the advisers have dedicated support staff, therefore the alignment to each client is clear. Vincent noted the importance of ensuring multiple people within the business know each client’s circumstances, even if their adviser is away. It’s not just about having expertise, it’s about the high touch proactiveness which is a strong reason their clients value their service.

Stanford Brown very much build their business on a “trust-based relationship service”. Vincent continued to explain that besides word of mouth, Stanford Brown produces a reasonable amount of marketing content, regular monthly investment market updates, podcasts, whitepapers on investments and other financial services. He also highlights technology’s role in the business to smooth the process and enhance the client experience. “We are very much holistic advisers, therefore gathering information on clients through the myprosperity app is incredibly helpful.” Gathering as much information before a client meeting means they have time for a much more valuable in-depth conversation as well as uncovering other opportunities, making for a richer client experience.

Vincent admits there was probably more resistance to technology 2-3 years ago, but since the pandemic started 18 months ago, it has certainly accelerated adoption with his client base. Being in the main second lockdown in Sydney, Vincent strongly implies it is much easier now to provide an exceptional digital experience. Clients are much more accustomed to it and Stanford Brown collectively agree that technology is now a perfect compliment to their presonalised service. Vincent explains that across the board what technology is allowing to happen is the quicker sharing of information, up to date data and multiple touch points throughout the year. Clients are prepared to pay for the value they receive, after all it is trust and personalised service that drives client commitment and word of mouth referrals.

Leading by example, Stanford Brown prides itself on providing holistic advice, understanding a client’s entire world and being at the centre of it helping them navigate through whatever life throws their way. The highly personalised and high touch service they offer is complimented by technology, helping deliver a professional and valuable experience.

Over the last couple of decades, the financial services industry has been slowly digitising every aspect of how they operate, from document management to customer engagement and complex content creation. The focus for many has been around efficiency, asking the question, “How can we take our manual processes and analogue data and digitise them in order to save ourselves time and money?”

This is great and necessary, however, it falls far short of the real opportunity presented to us in this fast-changing, digital world. The opportunity for disruptive innovation through digital transformation.

I have been lucky enough to work in several different software and services organisations over the years, from large financial institutions like NAB, ANZ and AIA through to fast-moving software organisations like Xero, CarSales, PEXA and now myprosperity. A similar approach I see time and time again across these organisations is technology playing the part of digitising the current manual process by automating steps, removing error-prone processes, and making data more readily accessible. Whether it be Xero or PEXA playing the part of digitiser or NAB and ANZ being the recipients or requestors of that automation. 

Digitisation is a huge efficiency gain and tends to create a better customer and employee experience – everybody wins. However, digitisation only gets us 25% of the way to where we should be. This is where digital transformation comes in. If digitisation is an evolution, transformation is the revolution.

Digital transformation is the process of reimagining how you engage with and provide value to your customers, transforming your complex combination of people, process and tools to create a completely new approach to achieving yours and your customers’ objectives. We see digital transformation occurring in every industry. Every one of us should look to those examples of success and failure and think, “How can I ensure I’m the example of success and avoid becoming a cautionary tale of failure?”

We can’t talk about transformation without mentioning Blockbuster, Netflix, and Disney.

The revolution was streaming, initiated by Netflix. Blockbuster was the clear casualty for failing to evolve while Disney and other similar providers capitalised on the opportunity and now represent clear complementary players to Netflix’s original dominance over the space. For Netflix, the ability to revolutionise made them a multibillion-dollar company. For Disney, their ability to recognise and apply digital transformation secured their continued dominance into the digital age. For Blockbuster, the failure to evolve was catastrophic.

Another great example of digital transformation is Uber. When Uber launched their app the taxi industry didn’t take it lying down, they eventually launched their own competitor apps – the problem was that their model didn’t scale, different taxi suppliers had different apps creating unnecessary friction to adoption, and most of all they didn’t tackle one of the core components of the Uber platform – the ability to rate drivers and customers. Uber created trust and promoted quality while the taxi industry relied on the fact that they were the incumbent – a terrible strategy for anyone paying attention to our recent history in disruptive innovation.

The last example I want to mention is my favourite cautionary tale. Kodak. Kodak deserves a special mention because they knew what was coming and had actually developed a prototype digital camera in the 70s. Through a combination of short-sighted thinking and greed, Kodak decided to fight back against the digital revolution in favour of their cash cow, selling film and printing photos. This led to Kodak filing for bankruptcy in 2012 – a spectacular fall from grace for one of the largest companies in the world.

So what about the financial services sector?

What has not occurred is any true disruptive innovation in how households, businesses and financial service providers engage and interact in order to achieve their objectives.

As an Australian, I want this transformation to start from our home and be our export to the rest of the world. We have the knowledge, the capability and most of all the culture and mindset to make it happen. Our retail industry is already being ravaged by overseas disruptors like eBay and Amazon and, while we are beneficiaries of this new and amazing experience, I would much rather we were also the founders, shareholders and employees of those companies.

We cannot let our financial services industry suffer the same fate as the retail sector – the opportunity is clear and it is our responsibility to take it.

How can we make this happen? Every institution and financial services provider needs to ask themselves today, “What investments am I making in disruptive innovation?” It doesn’t need to be big, just enough, think of it like paying insurance against the potential of being disrupted.

For larger institutions: Are you experimenting with new ways of achieving the core objectives of your customers? Smaller service providers and sole practitioners: Are you taking advantage of the new technologies available to you and attempting to reimagine how you, your customers and your partner service providers can be working together?

At myprosperity, our newest experiment is Rooms. This represents a start to our own disruption – how we (the myprosperity team) work with our users to not just digitise how they currently work, but to work with them to transform the way they operate. This will lead to significant benefits for our users and their clients – achieving their objectives easier, faster and with a customer experience that they can be proud of.

Don’t let yourself become another cautionary tale of the ongoing digital revolution! Digitisation is the enabler of transformation and it is time we all start taking this opportunity seriously and look to uncover the innovative opportunities available to us to transform how we operate within our organisations and with our customers. Real transformation in how you, your team and your customers operate and communicate will lead to revolutionary benefits to all people involved within the systems we all operate.