Technology: Servicing clients from end-to-end

01 August 2018

Financial planning software should support advisers in their entire financial planning process and allow them to save time and effectively service clients throughout their lifecycle.

There are many technology tools out there for advisers to use at a various stages of the financial planning journey, however, most of them are designed with one particular stage or problem in mind.

With so many financial planning tools in use, the financial planning process gets fragmented. There are also significant risks (errors in re-keying information or using the wrong share class) associated with using multiple financial planning tools that do not integrate.

That’s why it is important to choose the right financial planning tool that allows advisers to service clients throughout their lifecycle - all in one place. Let’s focus on key points: addressing needs of various client segments, compliance, back office integration and flexibility to use your own CIP.

Choosing the right workflow

Clients in different stages of life have very different needs – for better client outcomes, it’s important to start from the beginning and apply different risk profiling approaches to clients in the accumulation and decumulation phases.

This means that the financial planning software needs to have several workflows designed to help advisers service clients who are looking to grow their wealth, saving for a life event, protect their family, plan for retirement or withdraw an income.

An accumulation workflow, with appropriate risk profiling tool, helps advisers with clients who are building their wealth, planning for retirement or saving for a particular objective.

A decumulation workflow is designed to help advisers with clients who are retired or semi-retired and are looking to withdraw an income from their investments. Instead of the linear scale of risk appropriate for accumulation, the decumulation workflow risk profiling needs  to make sure advisers are able to easily consider their clients’ needs for the future as well as for today and project whether their income will meet their needs. They can then seamlessly go on to research solutions to provide the required income, ensuring investment suitability.

Defaqto’s latest version of financial planning software, Engage Core, takes this into account. Engage Core has different workflows for clients in accumulation and decumulation phase of their lifecycle with different risk profiling tools to ensure suitability of the advice and guarantee best outcomes for clients.

Defaqto also kept in Engage Core their popular research workflow, designed to help advisers and paraplanners with all their clients, in all stages of the life cycle. Three-way fund, product and platform research allows advisers to start in any one area to refine research results and only see compatible options in the other two.

A seamless process

The financial process can be very fragmented, yet using a financial planning software that integrates with back office systems can significantly reduce the time needed for administrative tasks and reduce the amount of errors. It enables advisers to create, store and manage client information, goals and research all in one place.

A flexible software should offer the option to create growth, income or protection goals for their clients to service all client segments.  Advisers should always consider if the tool they are using has a capability for each goal being able to have a different risk level. For clients to be able to make an informed decision, it is beneficial to create multiple versions of research for each goal so that you can discuss all aspects of the proposed solution.

 Engage Core users can now use off-the-shelf integrations (including Intelliflo and IRESS), or standard API to develop new ones, for seamless integration with their back office. Advisers can pull their client details from their back office into Engage Core, conduct their research and then push their recommendation(s) back to transact. This eliminates the need to re-key details, making the process faster, less prone to errors and more efficient.

In Engage Core, an automatically created chronological timeline shows all the history with a client, providing an overview at a glance. It also creates automatically editable reports documenting every step that can be shared with clients. This kind of evidencing documentation, along with the risk-rated fund documentation in the Engage Core toolkit, is invaluable when it comes to satisfying regulatory requirements in this age of increasing scrutiny.

Supporting all investment methods

Using centralised investment propositions (CIP) is very popular among adviser firms despite the fact it can bring up suitability concerns as raised by the FCA. The challenge is to risk rate properly model portfolios to ensure better client outcomes. Financial planning software thus needs today to cover wide rage of portfolio construction methods including: adviser-led model portfolios, risk rated multi-asset funds, risk rated DFM managed portfolios, risk-optimised single-asset or manual selection from the whole of market.

Defaqto kept this in mind and included the possibility to programme in adviser’s CIP into Engage Core. Each model portfolio is assessed to get a Defaqto Risk Rating to ensure suitability.

 At the same time, Engage Core give advisers access to Defaqto’s expertise: over 17,000 funds are analysed including fund performance, risk adjusted return ratios and costs as well as over 200 DFM propositions and 1,000 DFM managed portfolios including performance and asset allocation information.

Advisers can also pick from over 600 Defaqto risk rated funds and DFMs and over 30 income risk rated funds, including most popular ones. 

A total of £15bn was recommended in Engage from May 2017 to April 2018.

With 49 out of 100 top adviser companies already using Engage, get in touch today to find out more. You can also download an overview of Engage Core features here.

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