In a changing world, long live advice!

By Sean Hanlon, executive director of sales and distribution, BrightRock

The more things change, the more they stay the same. For the financial advice profession, this old adage may at first glance seem counterintuitive, especially in an environment where tough economic conditions and the rapid emergence of new technologies are enabling seismic changes in consumer expectations and behaviour.

Take hyper-personalisation, for example, just one of the latest in a burgeoning sea of industry buzzwords. Taking their cue from online offerings like Netflix and Spotify, where algorithms make it possible for product providers to keep serving consumers what their past behaviour has suggested they like and need most, clients are increasingly looking to financial services providers to deliver customised, convenient product and service offerings that anticipate their every need.

At the heart of these developments, however, is something that financial advisers are uniquely equipped to do – to understand individual’s needs and craft solutions that meet them. New technological developments are not necessarily replacements to financial advice, but tools and enablers. A great financial adviser is a trusted partner, navigating alongside their clients on a journey towards their dreams. Great advice is not about churning out data, calculating, numbers and recommending products; it’s about understanding hopes, anxieties, and the unique tapestry of circumstances that make each client’s financial landscape distinct.

In other words, there’s no substitute for great financial advice, which means advisers have tremendous opportunities to deliver value to their clients. In fact, the latest consumer surveys show that South African consumers continue to value and seek financial advice. According to the 2023 ReMark Annual Global Consumer Study1, over 70% of the South African respondents surveyed sought the advice of an adviser, as follows – 41% consulted an insurance agent or adviser when buying insurance, while the remaining 29% sought out an independent financial adviser. By contrast, only 8% made use of a virtual assistant or chatbot.

Heading into 2024, then, what can financial advisers operating in the life insurance space do to harness the insights underlying some of the latest developments and technology platforms to respond to evolving client needs?

Stay connected: Meeting clients’ needs in the long-term requires the understanding that clients’ needs are constantly changing and evolving in real-time. Staying in regular touch with your clients means you can stay abreast of lifestyle changes, career advancements, family developments, and market fluctuations. Of course, it’s vital that you also select and recommend products that support a needs-matched approach that offers your client a personalised solution. This requires a change in the advice process that looks beyond standardised price and product comparisons to highlighting specific features that address unique scenarios.

Educate and communicate: You don’t need to be a tech developer to segment your client data so you can deliver relevant educational content on life insurance and related financial topics to your clients. Timely emails, social media posts and concise, personalised newsletters can help to keep your clients informed and engaged without overwhelming them.

Tap into apps and insights from behavioural coaching: Increasingly, there are apps and AI solutions available that can enable your clients to better understand their own risk profiles and help them anticipate and manage potential financial concerns. These financial apps and AI-powered coaching bots can help your clients analyse their spending patterns and identify triggers for impulsive decisions to offer proactive guidance and prevent financial missteps. With a little bit of research, it’s possible to identify and recommend credible, affordable tools to support your clients.

Remember, technology is always an advice tool, never a replacement. Face-to-face conversations and personalised interactions are the only way to build trust and emotional connection with your clients. Clients are more concerned than ever about data privacy and security, so it’s important to be transparent about how you use their data and what tools you employ in your practice – and to ask these questions of the product providers you work with.

Most of all, the only way to respond to the latest technological advancements is to learn about them. To confidently leverage new tools and effectively integrate them into your client interactions, it’s important to stay abreast of the latest developments and seek out information and training to help you understand how you can use them in your practice. By integrating technology into your practice, it’s possible to elevate your value proposition, build stronger client relationships, and navigate the evolving life insurance landscape in a proactive, personalised manner.