Ahead of the WP WealthTech Summit, advisor – and event speaker – talks about why industry must move outside its comfort zone
No client wants to deal with a technology dinosaur; they want someone who is on top of innovation that will help make their lives easier.
That’s the view of Jason Pereira, partner and senior financial planner with Woodgate Financial, who is a moderator at the virtual WP WealthTech Summit on May 18 for a session that will examine how the wealth industry is adapting to technology and revolutionizing the future of advice.
For those advisors who tell themselves they aren’t into technology, Pereira offers a strident reminder. Whether it's your cell phone, computer, dishwasher or the COVID-19 vaccine, technology is infused in our everyday life.
What the the self-proclined luddites are really saying is that tech takes them out of their comfort zone – and for an advisor in 2021, that makes little sense.
Pereira said: “The pace of innovation is basically exponential, not linear. So, go ahead and ignore it, stick to a paper environment, stick to a server, stick to your CRM, go ahead and do all that. But here's the reality … other people are figuring this stuff out; other people are learning to automate and manage the process, especially now because we're talking about the future.”
The result, he added, will be that these advisors will increase their business because clients will find life easier and margins will be better. If you think margin pressure is bad now, wait for the time when tech-savvy advisors start coming after your AUM.
Finance professionals should be excited by automation, Pereira said, as well as compliance technology, which will ensure everything is correct as you go through the process rather than discovering errors after the fact.
“You are going to see a massive reductions in the next 10 years in the number of a, compliance officers, because there is a lot that’s going to be automated and b, administrators, because a lot of that will also be automated. Labour costs, if you are smart about this, will come down precipitously.”
As of now, Canadian WealthTech is lagging some way off the pace of the U.S. but Pereira told WP this might not be a bad thing as we have the chance to build things faster and better, and move it forward. However, Canada's basic level infrastructure – our connectivity – is “archaic”, so old technology will have to be overcome.
For advisors, they can evolve or die, he warned. “You're not going to die all at once – there is no meteor coming; you’ll die by 1,000 cuts.
"One of the fundamental mistakes that technologists make in looking at this business is they come with a solution and they always say, ‘this will allow you to serve more clients’ because they're thinking of it from the mass-market standpoint.
“In reality, especially is you look at the US and where the smart business is, you can serve the same number of clients at a lower price, with lower overhead costs, higher margins and more intimately, more deeply and in more ways.”