Advice has become the product
Posted on 1 Feb, 21 by BrightRock
If great advice is a product, what are the differentiating features that set it apart?
One of the new buzz words doing the rounds in the business world is the concept of PaaS, short for ‘Product-as-a-Service’.
A needs-matched approach
It refers to a business model where companies allow their clients to purchase a desired result, rather than just the components needed to achieve the result. It is an approach made possible by emerging technology, and the growing demand from consumers, to be able to access what they need when they need it, as efficiently as possible.
The approach also relies on the ability of product providers to package a bundle of products and services together, to achieve the desired outcome for their clients. Think about Uber, for example, where clients can get from point A to point B using a single interface that combines booking, confirmation, navigation and tracking, cashless payment, and access to secure, reliable transport – all packaged together conveniently on their mobile devices and available on-demand.
This focus on a client’s needs or desired outcomes is a central tenet of a needs-matched approach, and it is a concept that financial advisers understand intuitively. An adviser’s role is to work with clients to define a desired result and to bundle together a set of solutions that aim to achieve the results identified. Great advisers are those that go beyond selling a product, to selling a set of outcomes that correspond to clients’ financial needs and aspirations.
Features that set great advice apart
If great advice is a product, however, what are the differentiating features that set it apart?
Great advice should be:
- Customised, accessible and flexible – both the advice and the product solutions offered must be tailored to each individual client’s specific needs – and this extends not just to the performance of the product, but also to the services that go hand-in-hand with the product.
- Fit-for-purpose – the advice and product solutions should deliver the most comprehensive cover possible, to limit clients’ financial risk and exposure. And where affordability constraints leave gaps, the adviser is critical to helping clients understand these.
- High-quality solutions at an affordable price – both for independent advisers and their tied counterparts, the choice of product is key. Financial advisers have the ability, through a rigorous advice process and in-depth industry knowledge and experience, to understand their clients’ needs and, just as importantly, to help their clients understand how the products offered by the adviser can meet the clients’ needs – and which, if any, of those needs cannot be met by the proposed solution. The choice of dynamic, innovative product technology that can support and enable financial advice ensures that both clients’ and advisers’ needs are met.
Embodimentof the PaaSmodel
Great advisers need to have access to good quality financial products and services to be able to deliver to their clients. An adviser that is caring, knowledgeable, diligent and committed to building a long-term, personal relationship with their clients, is the embodiment of the PaaS business model.
According to ReMark’s Annual Global Consumer Study, clients expect their advisers to make the advice process both personal and seamless. Over 40% of consumers preferred contactless channels in 2020 – this almost doubled from 2019. This was for all aspects of life, not just insurance. However, when looking at insurance, consumers still trust their advisers and, in fact, their interest in face-to-face, human advice has increased with 42.2% of the respondents in 2020 saying they trust automated services less than human advice. This is up significantly from 33.5% in 2019. On the claims side, this was even higher with 50% of people preferring human contact.
The bottom line is that great advice boils down to human relationships – albeit facilitated, at certain points of the interaction, through convenient, contactless channels. But in the end, the successful adviser – whether tied or independent – is the one who focuses on their clients’ needs first and foremost.
This article first appeared on page 19 of the FANews Magazine published in February 2021 and is attributed to Sean Hanlon, BrightRock Executive Director
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