Goss, at least, is fully signed up and fintech aware.
Indeed he has published a book, Catching the fintech wave, to explain how fintech can transform a financial planning business.
But he is a doer rather than a teacher, which is where Dynamic Planner comes in.
Traditionally, by which I mean starting 30 or so years ago, financial advisers had to “Know Your Customer” and this involved filling in a questionnaire which was about 80 pages long.
Clients were given a score which said how much risk they were willing to take, judging from how they coped with the questions.
Financial advisers would then pick funds which they hoped would match their score. It was pretty inept, but seemed the only way of doing things.
Goss and Dynamic Planner has automated and enhanced this.
Instead of an 80-page paper, it has algorithms which helps the adviser find out what the client really thinks and what they want, as much as anyone knows. It then produces a risk score of between one and 10.
Similarly it has databases which will find the clients’ existing scattered financial products and consolidate them on to one page of an ipad so the financial adviser and the client can keep track of progress. It takes about 45 minutes, as opposed to nine hours for the paper-based questionnaire.
Goss takes cost and the time out of the equation, which is a huge step forward for financial advisers. And it is not just those of high net worth who are helped. Clients with relatively small sums of money can be accommodated too.
The trick is then to match the client’s risk appetite with his or her lifetime goals. The adviser should match the score with what the client wants, for example how much a pension will cost for his or her level of risk.
The client then either pays up as required or pays less but accepts that the pension will most likely be lower too. That way the client can match, or not, his or her financial goals with his or her financial commitment, or so the theory says anyway.
The real prize though is risk targeting. Fund managers traditionally have not really known what clients want in terms of risk and the client and the fund manager seldom have the same risk profile. The result typically is that the fund blows up and the client does not achieve his or her goals.
But now, because the risk targeting is so much better because of fintech, asset managers have started producing funds which match that level of tolerance to risk. This is where the industry is going.
Fintech can therefore make a difference. It can get the clients risked. The financial adviser can choose funds which match that risk tolerance. Dynamic Planner can then monitor the outcome. And for the mass of consumers this seems just what they want.
