Part 1: Advice Tech Integration: Open vs Closed

I want to talk a little about the sorry state of the UK adviser technology landscape. We know that the flow of data between the various systems that advisers use is grossly inefficient.

Much of the data sitting with platforms and providers is needed within retirement and financial planning software. You need that same data in your CRM or back office system to write a report for your client and the integration between all of these systems leaves much to be desired.

I personally believe this is one of the reasons for the high cost of advice or low profitability of advice firms. For far too long, advisers have tolerated poor technology. So, the sooner we fix this, the better for everyone.

The question is what are we going to do about it?

I can certainly tell you what we’re doing about it!

At Timeline we’re building our integration microservice, which allows our users to pull data from CRM and custodial platforms. We’re also testing our opening banking integrations. So, with the single end point, users will be able to pull data from all the systems they use.

We’ve built this as a micro service, so we can provide the same end point to other technologies and start-ups coming behind us. We’re not only fixing the problem ourselves, we’re helping to fix that problem for others.

Until advisers start to vote with their client assets, I don’t believe we’ll see a meaningful change in this space. Advisers must become less tolerant of poor technology – putting up with the current state doesn’t help anyone.

I hear a lot of excuses along the lines of: ‘you know, providers’ technology is built on old code, on very boggy infrastructure, that was designed donkey’s years ago’.

This doesn’t really cut it for me; think about banking for instance, it’s a much bigger and older industry than investments and pensions.

If banking can be pulled, kicking and screaming into the 21st century and forced to implement open banking, I don’t see why we should make any excuses for investment and pension providers.

The other problem in certain quarters is the attempt to solve this sorry state of affairs by using the same approach that created them in the first place.

A few weekends ago, there was a conversation on Twitter, started by my friend and financial planner, Tom Orchard. One of the ideas put forward was that you send the client a letter of authority electronically, the client downloads it and signs it. I know, it’s absurd. They append their wet signature to the form and upload it to the system.

It’s then sent off to the provider. And, hopefully, if the provider is happy with this signature, they’ll send the valuation back to the adviser.

This is the exact thinking that created this problem in the first place.

Why do I say that? Well, in virtually every other domain – in retail, travel and indeed in banking – consumers don’t expect this experience.

We can download stuff at the touch of a button, append signatures and upload it straight back. Adviser technology should be considering the customer experience in other sectors and using that as a basis. We want to be building for the future. We want to be skating where the park is going, not wasting a huge amount of time and resource dragging everyone back into the dark ages.

This backwards-looking approach needs to stop. Now.

Other countries are embracing the idea that every financial provider should have an open API, for other technology to connect to. Advisers in the US have been able to gain client authorisation or get access to their client data using open finance technology. And that happened without legislation (not that I expect that to happen here in the UK).

The FCA has started to look into this idea of open finance. And so, we’re going to see some movement there. But my point is, why wait? Adviser technology needs to be building the future and not dragging everyone back into the dark ages.

We’ll be sharing part two of Abraham’s Tuesday thoughts tomorrow. Keep your eyes peeled.

Abraham is the Founder and CEO of Timelineapp. He has authored the Beyond the 4% rule book, written several industry papers and delivered many talks. He holds a master’s degree from Coventry University and an alphabet soup of designations, including the Investment Management Certificate, Chartered Financial Planner and Chartered Wealth Manager.


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