In our July blog (“Forget the F-Word:  It’s the D-Words That Matter), we touched on the D-words that will have the longest lasting legacy and most profound effect on most industries, including financial services and wealth management.  It’s the D-words that will compel participants to re-write their strategies and to re-wire their businesses – more so than FoFA.

We listed the D-Words as:

  • Democratisation of content
  • Digitalisation of delivery
  • Disintermediation of the value chain.

We added a fourth D-Word, Disaggregation – the possibility that the current high levels of market concentration and institutional ownership will reduce over time.

Fear not Horatio – it’s not just you.  All industries, one way or the other, are being profoundly affected by the D-Words.  If you are stressing about the impact of the D-Words, there is hope (and T&C can help, of course!).

Take the first D-Word for example – the Democratisation of content.  If you think clients are increasingly armed with information about markets and investments or that the proliferation of financial information is creating more and more DIYers and semi-directed investors, then spare a thought for your professional brethren, the humble teacher.

Gone are the days of the teacher standing in front of the class imparting pearls of wisdom to an attentive and diligent student, copiously taking down notes for regurgitation at the dreaded year-end final exams.  “The Australian Gold Rush you say?  Why it’s all here on my interactive iPad – all I need to know!  Been there, done that, got the T-shirt and the McDonalds’ toy!  What’s next?

Woe betide the teacher who isn’t in a position to add value, stimulate, interact and tailor to Little Johnnies’ or Jennies’ needs for visuals, sound, smell, touch and taste.

Many aspects of the revolution in the classroom are characterised by:

  • Volume, accessibility and variability – not only is more and more educational information available outside the classroom, the accessibility of that information has increased exponentially, particularly given the proliferation of the iPad.  The quality of the available information also varies markedly with people trying to cash-in on the trend, some with more educational rigour than others
  • Impact – The consequences are already being felt.  New market entrants fuelled by the trend to outside school coaches and learning portals, collaborative teaching methods rather than the “I talk, you listen” style and even collaborative on-line homework (previously known as cheating)
  • Differentiators – leading schools are re-configuring class rooms to deal with multiple data sources and pod-based, collaborative teaching systems.  Teachers are up-skilling to stay relevant.  The latest “whiz-bang” textbooks are on-line, interactive and capable of being updated by their users.  More importantly, pastoral care and coaching (as compared to traditional teaching) is a key differentiator, with trust remaining the essential teacher/student relationship

Sound familiar?  Absolutely!

  • Your clients cannot pick up a newspaper, surf the web or watch television these days without being bombarded with investment and market information, of vastly variable quality
  • The self-managed super phenomenon is partly fuelled by this proliferation of content.  New market entrants have emerged to capitalise on this
  • Participants in the wealth management industry will need to differentiate themselves and their practices to survive, in the context of a veritable ocean of information and self-help proponents.  There will be more emphasis on tailoring solutions to the needs of clients, more emphasis on arranging, sorting and discerning information to facilitate outcomes based advice, more professionalism and specialisation, and greater use of technology to enhance connectivity and interaction with clients.

For the wealth management industry, it’s time to ditch the blackboard and chalk.  There are professionals in other industries using the latest technology to achieve “best interest” outcomes, alongside the traditional values of trust, mentoring and pastoral care – exciting and stimulating their charges into “discovering what’s possible”.