Fortnum backs data as game changer in advice

Financial advisers want flexibility to design their own businesses, but what does this mean for fast-growing, privately-owned licensees and advice collectives?

This is one of the challenges for advice practices who want a greater degree of freedom and flexibility but are acutely aware of their risk and compliance obligations.

“They want freedom in a framework,” explained Fortnum Private Wealth’s Managing Director Neil Fortnum.

Speaking recently at a HUBconnect webinar titled ‘The future of technology and data in enabling advice’, Younger said advisers are looking for a broad framework which recognises the increased risk they are exposed to in this model but allows them to be creative and to develop innovative solutions for the end consumer.

“The balance becomes critical. Inherent in advice is regulatory risk and financial risk, so we need systems and processes in place to provide comfort. The [regulatory] guides are clear but the interpretation in practices is challenging.”

Skin in the game

Fortnum Private Wealth is one of the advice collectives HUBconnect has been working with to identify and address these challenges. HUBconnect is leveraging HUB24’s data and technology to create a baseline data set which can be structured using machine learning to digitize advice and provide clients with a single view of wealth.

According to feedback from the advice collectives, cost to serve is one of the most challenging aspects of taking advice to more Australians, one that can be addressed with better data.

“Data and efficient information have become an even more critical part of success,” said Younger. “Risk is individual to a practice, but it is a collective industry risk that we think we need to solve.”

It is for this reason Fortnum has decided to collaborate to help build an industry solution.

“As a licensee, we don’t want to prevent advice from being delivered,” said Younger. “We want more and more advice to be delivered. There is not a lot of competitive advantage in cracking the same nut.”

Accessing data and cleaning it

The first challenge for many advice practices coming from a previous institutionally owned licensee structure is sourcing the data.

“The information has been in the product layer not in the advice layer, and they are not particularly integrated,” explained Younger.

By leveraging HUB24’s data and technology, it can assist in extracting the data, cleaning and structuring it and storing it in a way it can be used to solve challenges.

To do this, it uses machine learning to pull out the unstructured data from sources such as emails and SOAs. The common information can then be sorted and storied and applied to key business challenges a licensee wants to address.

Help us identify risk early

Fortnum wanted to use their structured data to illuminate and identify Key Risk Indicators and apply filters to the data to help identify trends or patterns.

“We wanted to see if there was a flame flickering versus a bushfire out of control,” said Younger.

Currently, the system designed by HUBconnect cleanses more than a thousand documents overnight and produces a report which highlights to the licensee any area that needs closer attention.

Younger said he is excited about what he is seeing but Fortnum is just getting its minds around the possibilities this cleansed data could offer the business.

“There is a plethora of different ways you can pull the information and we are at the early stages on what that could look like. At the moment, we are dealing with the obvious.”

• Watch ‘The future of technology and data in enabling advice’ webinar featuring Fortnum Private Wealth’s Neil Younger
• Check out our related research paper, “The future of technology and data in enabling advice.”