Transcript

Peita Diamantidis (PD):

Hello and welcome to the Ensombl Advice Tech podcast. I'm Peter Diamantidis, and this week we're kicking off the first of our new advice tech feature episodes where we sort of discuss broader ideas and issues the industry's facing when it comes to tech. But I promise next week we'll return to our regular programming and dive into a specific app. Now, today's feature topic is tech and the client value proposition. And who better to have the first of these conversations with than the self-confessed tech geek from Netwealth and a particularly stylish wearer of Silicon Valley Chic. It's Matt. Hi. Woo.

Matt Heine (MH):

Oh, that's very generous of you, Peita. Good to be back.

PD:                                                          

<laugh>. It is. I'm so glad to have you back. I mean, you are my first returning guest for the Advice Tech podcast, and I think you were back all, all the way in episode five.

MH:

It feels like a long time

PD:

Ago, forties. Now it does feel a long time ago. I feel like I've aged since then <laugh>. But before we dive in, as we always start and, and the listener knows this, we normally would dive into things like emoji use and smartphone apps and all that sort of stuff, which we've done with you before. So as a returning guest, the first thing I'd love to know to learn a bit more about your tech use is if someone came to you and offered to build the perfect AI buddy just for you, what task would you want it to magically do for you? That's

MH:

A, that's a very good question. I'm actually a bit disappointed that you didn't ask me the same question you did last time, <laugh>. So I was, I was a bit embarrassed by my response. I was very pedestrian and, and, uh, and had I had more time, I'm sure I could have come up with something much better <laugh>. So what, what would I have as my perfect AI buddy? So, probably like many listeners, I'm already using chat sheet bt for a whole range of things, including, uh, writing bedtime stories for my kids at night. Uh, which if you haven't done it, is great fun because, oh my goodness, depending on what time of the night it is, you can choose a 500 word story or a thousand word story, and basically you get them to pick the key ingredients. So the last one I wrote was my son wanted to turn into a lizard and, uh, fight evil with his best friend a Vander.

And what was amazing about it was it actually not only wrote a beautiful story, uh, but then it finished the story with the, uh, the moral of the story, uh, which was about, despite diversity, um, and facing into adversity, uh, when you're supported by good friends and family, you can fight whatever you want. So that, that was pretty amazing. Amazing. So if you haven't tried it, I highly recommend it, but that's, that's incredible. What would I want as an AI buddy? Probably, um, along a similar theme, if I could have an app or some technology that translated what I asked my children into something that they actually listened to, that would be, that would be amazing.

PD:

Like the intuitive translation, right? So it's not Correct. It's not language to foreign language. It's it's intent to something that they're interested into, like may, maybe it makes it into a rap song or something so that at least they're listening as you, as you ask them to do things

MH:

Exactly Right. So if you come up with anything, please let me know.

PD:

<laugh> Ill, but I'm definitely stealing the chat GPT use. That's fantastic. That's great for a bedtime story cuz there's nothing worse than those of us that aren't that creative trying to come up with a random bedtime story. It's just not pretty, you know, it's when you start to fail as an adult, I've discovered when you're trying to do those things.

MH:

And the best bit is, which I haven't done yet, but it's, uh, next on my list, is you can then use Darlene to actually illustrate the story that you've just written on chat cpt. So, um, yeah. Hours of entertainment.

PD:

Oh my goodness. Yeah. Everybody's running away. They've all paused now and they're all gonna run away into it now. So now my second question actually is sort of taking a look back, I guess, look, not all new tech is good tech, right? Not all new tech makes things better. Is there anything that you love the analogue version of better than the New Tech?

MH:

Can I just go with life?

PD:

Yeah. <laugh> Living.

MH:

Yeah. Living, living li life was a lot easier without a, a mobile phone and a, and a laptop.

PD:

It sort of is. I completely, it's why we all love holidays when you can, when you can just lose, you know, you have no contact, there's no wifi. I love it when they say that we don't have any internet.

MH:

It's actually my favourite favourite thing to do is to, to lock myself away without a phone, uh, up in the hills for five days, uh, with no technology, no newspapers. Uh, you come out feeling incredibly refreshed. It's, uh, it's liberating. It

PD:

Is. I do the same. I pretend that that planes don't have wifi anymore. <laugh>, I just pretend like I can't do any of that. Just relax.

MH:

I get

PD:

Too good. All righty. Right. All right. Right. Let's dive into client value propositions and tech, shall we? So advisors like me, you know, we often focus on tech, uh, and we focus on that sort of operational efficiency, you know, the productivity sort of focus, which is natural. I mean, that's where technology's always started. Um, but there's loads going on in the client value proposition space. This could be whether it's investment philosophy or even the customer experience. So, you know, let's start with the investment philosophy and offer. We're doing, you know, a lot of discussions about that on the ensemble platform. Advisors are really going much further in terms of what they're trying to deliver. What are you guys seeing in terms of clients' needs or demands from firms and what they want, you know, in terms of how we need to enhance or sort of reconsider our investment philosophies?

MH:

Yeah, so I, I think this is a trend that's been playing out for some time now. So it started in the US um, probably 10 years ago. And we've seen, seen, seen movement in the Australian market, but really has accelerated, I think throughout covid, uh, with market volatility and the need to be doing more, uh, regulation overload, et cetera. And I guess rather than getting into a discussion necessarily now about different legal structures, SMAs MDAs, if we, if we sort of talk broadly about automated investment solutions. So finding, uh, ways to scale your investment philosophy is really what advisors are looking for. Yeah. Um, and really that means that if they can find a way to first of all articulate and describe what their value proposition is around their investment philosophy and then implement it as efficiently as possible, it means that they can start to really focus on delivering great service and, and focus on that strategic piece, which is, um, where, where we all know advisors can add the most value.

So we really see, have seen, you know, managed accounts particularly, um, you know, grow exponentially over the last three years. And, uh, I've just done a roadshow around Australia talking about some of the things that we are up to. And one of the interesting statistics was that, uh, if you look at our managed account in 2019, so we've been in the market for five years. We were one of the, sort of the pioneers, if you like, um, in the managed account space. Uh, and, but it had taken some time to get traction. Mm-hmm. And so, um, in 2019, the manage the size of our managed account was, uh, two and a half billion dollars. Um, now if you fast forward to today, uh, it's in excess of $13 billion or, you know, three and a big year later. Ok. Which just shows you that exponential growth throughout that period.

Uh, and what's really interesting is that within that managed account, we've got a very, very diverse user base. So we've got, uh, everything from, you know, smaller practises dealing with accumulators mm-hmm. <affirmative> all the way through to very high net worth individuals, ultra high net worth individuals looking at customised, um, portfolios and, and everything in between. So from our perspective, it's not a product, it's just a really efficient way to actually implement firm's investment philosophy. And that might be that they believe in passive management with, um, uh, strategic asset allocation, or it might be that they actually believe equities can add more value in the Australian market, but they want indexes and managed funds for overseas. So Right. The tool, the tools and the capability of managed accounts, and that could be through an SMA or in the mda a, um, you know, are very fast, faster period to what they were, uh, five years ago and certainly 10 years ago. Um, and really allow firms to differentiate their offer through their investment philosophy. Mm. Um, but also make sure that they're treating all their clients equally and that everyone's got the same access to their best ideas, uh, at the same time.

PD:

And it's an interesting, um, nuance there because I think a lot of the discussion around you manage accounts and all of the permutations thereof can be a focus on the investment insights and all of that expertise when that's only half of the tail, you know, the other half is this ease of implementation. So, so, and when I say that, I mean having something very personalised for that client and then being able to implement that easily, you know, that was always something that's been so clunky historically.

MH:

Yeah. And, and, and for any advisor that's, um, you know, had to, uh, try and run the business service clients rebalance portfolios over the last three years during extreme volatility, uh, it's actually not possible. Uh, and to deliver a great outcome to the client. So what we saw was, um, you know, incredible outcomes because investment committees were able to look at overnight data. They were able to convene in the morning, make a decision, and literally implement ideas that day for all of their clients. And that meant that as markets fell, they were able to de-risk portfolios by removing assets. And as opportunities presented, they were able to take, um, those opportunities as they arose so people were able to actually come out of it, um, in far better circumstance than they would have had they not been in a managed account. Um, and then you see really interesting combinations of it. We've got people using MDA licences and investing into SMAs for certain asset classes. And certainly the, the anecdotal evidence there is that they've suggested that they've added maybe up to 3% alpha because the first time they've been able to take the ideas that they've had from the investment committee and implement 'em in a reasonable time rather than taking 1, 2, 3 months maybe to get through all of their clients.

PD:

And certainly, um, I mean, this has gotta play a part when you start talking about E S G, and I hate that acronym cuz it's covering such a broad range of things. It's a bit, it's a bit just like calling it markets, you know, but anyway, it's, it's whatever the lens that that client has well, you know, what's important to them, the, the, it can't just be, well, there's this fund, you know, it just can't just be that because everybody's view on what is the highest priority for them, what's the thing that's icky for them. I mean, really that's a lot of what they're looking for. You know, really I'm not comfortable with that industry. You know, those sort of things. Um, I, I think it's gonna be a challenge just to have a fund that handles that. I think it is gonna end up being more and more personalised, you know, because the information's gonna get better too. I mean, there's, you know, tools starting to come out that don't just assess the underlying investments, they're gonna assess the fund manager, they're also gonna assess the platform. Like all of us are gonna start to be assessed on our sustainability targets. You know, so the information is gonna be there. We're gonna need a way to be able to pull that together and act on it. Yeah,

MH:

A absolutely, and I think that your, your comment on the platform's absolutely spot on. We are regularly being asked, uh, by clients to see what our CSR strategy is, uh, because they wanna make sure that it's not just the investments that they're investing into that are doing the right thing, but the providers in the middle, uh, are also having a, uh, uh, an impact and, uh, contributing back to community. So, yeah. Uh, that, that is very much front and centre. Um, SG is probably a topic for another day. I could spend hours talking about it. Uh, I think there is a long way to go. Mm-hmm. Um, I think that unfortunately the data isn't necessarily there to support the right outcomes. Yeah. Um, there's a lot of people working on it to make sure that we get more relevant, uh, outcomes. Uh, but to rely purely on, uh, I guess some of the current providers, uh, is a mistake. But look, it's really good. I think it's heading in the right direction. Um, and we know it's important to clients.

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PD:

Yeah. And that's the thing. I think people, um, just are gonna expect more and more ability to personalise, but also gain access. You know, they're gonna wanna be able gain access to alternatives and other things that otherwise we used to sort of be outside the primi of, of a, an advisor. Right. And so that's just gonna be the expectation of the public. Um, and our tools are gonna have to reflect that.

MH:

Yeah. And, and we're saying that and we get, uh, a lot of pressure or feedback or whatever you wanna call it from our clients, which we love because feedback is a gift. Uh, but around, um, that the platform or the the administration services that they're using shouldn't constrain, um, the investment choice Yeah. Or the investment requirements of their client base. Um, and so we spent a lot of time, uh, over the years looking at, you know, how do we make sure we support more and more of those asset classes or asset types that have been traditionally very hard to get hold of. Um, and we're seeing some really interesting combinations that are very differentiated, um, using all of the different tools in different ways.

PD:

Yeah. And it's, uh, look, I'm actually a bit curious then about, um, I mean, we spoke about AI very rec briefly up the front, but you know, are you, either you yourselves or what you're seeing out there, is AI being used more in any of the back office sort of admin perspective for platforms or investments? Is that coming up more and more?

MH:

Look, there's a lot of people talking about it. Uh, okay. I think one of the interesting observations, there's quite a few articles on this, um, bit of a segue, but, um, Apple's just released their new, uh, spatial computing headset mm-hmm. <affirmative> now you'll notice in that launch they didn't mention AI virtual reality once.

PD:

No.

MH:

They were very clear that that has got a, uh, a bit of a stigma attached to it now. And so they're seeking to actually recreate and redefine what it is that they do without sort of getting sucked into all, all of the buzzwords. And, uh, there is a tendency for firms, uh, and I think companies to, to throw around ai, uh, when it might be, uh, basic data analytics or, or machine learning Yep. Uh, as opposed to true ai. But at the other end, there are some, uh, obviously very incredible, uh, businesses being built on, on true ai. And, uh, obviously we've, we've talked about, um, chat share, but between some of the, the, uh, the outcomes that that's producing. So, uh, I think when, when you think about AI moving forward, there's a lot of business, a lot of companies that we're all already interacting with on a daily basis that we use to run our businesses that are using ai.

Um, I'm incredibly excited about where Microsoft is heading with their co-pilot products and how that's gonna be just embedded into everything that we use day to day. Yeah. And, and that's really not that far off. Uh, obviously Apple, Google, uh, all have, you know, very strong AI capabilities and machine learning capabilities behind them. So, uh, moving forward as we pick technology, it's important to make sure that we are looking forward two or three years and to understand what their AI or machine learning roadmap is as opposed to perhaps, uh, taking it that it does do it, do it Zara doesn't do it today. Uh, but yeah, we're probably as guilty as others, but, you know, we're doing some really interesting things internally, uh, from an operational perspective that help us identify documents automatically, index documents mm-hmm. <affirmative>, uh, we're, uh, using the technology to identify redact t FNS as an example. Yeah. Um, so I think the, the tools and the technology is, uh, is certainly accelerating. Uh, and we're gonna say it just populated into our day-to-day life.

PD:

Yeah. And I guess, um, I mean, I'm with you with Microsoft. I, I wondered if they were just gonna be too slow. Like this could be one of those moments where they, you know, there's almost a Kodak moment where they just lose a market cause they're too slow to respond, but they've really sort of taken that leap. Um, they really look and it's perfect. All of those tools we use every day, they're perfect applications for ai. Hmm. You know, there's so many repetitive things we do in them. Um, so I love that they're actually taking, you know, taking that leap and going down that, that path. I'm

MH:

Curious, I think, I think my Microsoft's the company to watch, uh, and if, if, uh, I know it wasn't one of your questions, people often ask who are the, uh, leaders that I most admire? Sati has gotta be up there. He's turned around a huge business in a very short period of time, um, and a huge elephant, right. A a huge elephant and doing some of the most incredible things. Uh, so kudos to them.

PD:

Yeah. It is exciting. And I guess, you know, for those of us, I mean, you will have a deep understanding of the difference between all these things, but for those of us that don't, AI sort of falls into a category a bit like blockchain for me in that it's like computer power. Like, it's like how can you do more with less? Uh, are you seeing more and more things sort of taking advantage of blockchain as a tool as well in investing?

MH:

Uh, no. <laugh>

PD:

No. No. They're not, they're not going down that path yet. They're not sort of taking advantage of what's out there.

MH:

No. Look, I, I think block blockchain as a technology is potentially very powerful. Um, and where we haven't seen evidence of, uh, I guess blockchain in this industry is really the, the business models that sit on top of it. Um, right. There's, you know, been big different blockchain projects within their industry. One of them is just closed down, um mm-hmm. <affirmative>, which some, uh, which was around, uh, fee disclosures and, and fee consent. Yeah. Um, and the, the reality is that there's really good databases and good technology that can solve a lot of the problems that people have tried to solve with blockchain and didn't necessarily need to. Okay. Um, so I'm not saying it's, uh, it's dead. I think it's just really got, um, a long way to go before we start starting to see real practical applications. Um, I know there's people that are looking at building new exchanges. Obviously chess has not been, uh, a great example of a, of a use case of blockchain. Uh, probably the wor the worst use case. Yes. Um, and, uh, and, and that's gonna set the industry back because people will be naturally gun shy now. So, um, I, I think it's a good technology. It's really about the business case and, and the business layer, uh, that I haven't seen anything amazing yet.

PD:

Yeah. And I guess, you know, I mean, you mentioned security and it's clearly front of mind for all of us now. Um, and I, I only imagine you guys are, are well down, down that path as well. Are you seeing, um, yeah. Are we evolving fast enough with that? Do you think? Do you think the industry is keeping up with what it needs to be doing on the sort of cyber risk and protecting our clients? Or, or do you feel like we're playing catch up a little?

MH:

Oh, I think it's a, a long way to go. Uh, so cyber is hard. Uh, the attacks are incredibly sophisticated. Uh, the number of attacks, the sophistication of the attacks is incrementally, um, you know, huge, um, since, uh, the beginning of the Ukraine, Russia conflict mm-hmm. <affirmative>, uh, we're seeing a a lot more, more activity. Um, and obviously we're seeing a lot more companies, um, you know, suffering, um, as a result of cyber attacks. So, um, it's something that people just have to be diligent about. You can't hope that it's not gonna impact you. Yeah. As an industry, we have more data than pretty much any other industry, including medical, uh, and we need to do everything we can to, to protect that information. So, um, if you are not thinking about it, don't have external professionals helping you, uh, it's something that you really need to, uh, to be looking at.

Uh, there's a couple of things on cyber. Uh, one is that people will almost always be the weakest link. And, uh, it's, you know, we can do training, you know, every day. Uh, but ultimately it's someone that clicks on the link that they shouldn't have or opens an email or an attachment that looked, um, suspicious, but uh, they hadn't picked up, uh, that will cause issues. Uh, and equally, you know, we do see a lot of attempted, um, you know, client frauds where, you know, see it's the classic clients overseas, uh, cuz their Gmail account hacked, uh, starts asking the advisor and, and us for money. And, uh, before you know it, there's lots of conversations happening left, right, and centre. And, you know, luckily we, we have a lot of processes in place to, to stop those frauds. But, um, yeah, you need to be diligent, um, and, and aware.

PD:

And it is one of those things we talk about in our, in our practise where, you know, the best thing at any point is a, is a conversation like actually com like communicating with a person, not using

MH:

Pick up outside

PD:

Stuff. Exactly. Just talk to them because that can circumvent so many of these things if somebody just spoken to somebody else.

MH:

Absolutely.

PD:

Um, and catch that. Cool. Alright, so then if we then take a look at tech in the environment of the client experience, which is probably something that all of us have begun to consider more, but we're probably in earlier stages, you know, we've still got some work to do along that line. We still historically had our client experience almost defined by legislation, and that's natural. But I think with everything going on, and I actually think last time you and I spoke, there were some announcements that dropped on the day that we spoke, and just recently we've also had Q A R come out and, and some things said that, that are gonna be changing. So it's quite good timing. Um, then, you know, technology and the way that it can improve or enhance the client experience is a real thing now, particularly with millennials now being a huge portion of the client prospects we're all gonna be dealing with going forward.

MH:

Yeah. I often joke or comment that the biggest innovation in financial services in the last two decades has been digital signatures. Uh, but I think unfortunately it's, there's, there is actually a lot of truth to it. And yes, as an industry, we, we need to get much better. And, uh, I think your comment before about, uh, the number of millennials probably not the point that's relevant. Um, and all of our research would suggest that, uh, if we use client portals as an example, and, and mobile client portals, when we've researched and done our Australian, um, advisable Australian reports, the needs and wants and desires of our high net worth, uh, established, affluent, and an emerging, um, affluent or millennial with money Yeah. Are almost identical. Yeah. Okay. But they all wanna be able to look at, uh, their whole of wealth on a mobile. They wanna be able to interact with their advisor via chat or some other, uh, social media, uh, chat or, or, um, or, or, or contact.

Yeah. Uh, they, they wanna be able to, you know, have an idea of what's going on in their, um, you know, budgeting world. So all, all of these things that have been sort of, I guess, pushed down the line as, oh, that's something millennials want, uh, it's just not true. And Covid really did accelerate that. Um, and if we all think about our own lives, uh, going back to, you know, our conversation about life being complex, um, everyone lives on their mobiles these days. Uh, yeah. And so the more that we can interact and create, um, context to those interactions, the deeper those client relationships are gonna be over time. Um, and there's lots of different ways that that can be done, but we really do need to start investing in that digital frontend experience, uh, not only because we know that, um, advice firms that have done it, it's only about 30% of the industry so far.

Um, but they're seeing much higher levels of satisfaction. They're seeing much, um, higher levels of client engagement. And then if you combine that with things like the consistency and reliability of a managed account mm-hmm. Uh, you know, all of these things are generating referrals and helping them grow their business. Um, and ultimately that is as important as making sure that we can produce SOAs and, uh, and those things as efficiently as possible. So, um, yeah, it is super important. The firms that do it really well are seeing the benefits. Uh, and the ones that, uh, continue to underinvest in this era, I think will find in two or three years that they've lost a lot of ground.

PD:

And it's an interesting, um, thing that when you look back at the way we approach these things, say it was, you know, there would be face-to-face, and then some people were doing video meetings and using more email, all the sort of things is, is the danger is that we see these new things as a secondary option. It's like, oh, we'll have it, but it's just a secondary consideration. And so we treat it accordingly instead of, what's probably the case is we almost need to shift to that as the primary. Like we almost need to behave as, which, as if those new things, whether it's via the portal chat, whatever it is, is actually the primary way and hey, we'll, we'll do it the other way if you need us to, but this is a way we engage because it's a mentality, isn't it? Mm. Like it's a complete change in the way your team do things, the default and the way they send things to clients. All of that's gotta change. We have to sort of adjust all our workflows and processes accordingly.

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MH:

Yeah. Mm. I, I see a world probably in two or three years where e email is not used as a tool for, uh, communicating sensitive information and it, and it, and it shouldn't be. Uh, it's, it's not the right tool. So the more that we can, you know, work collectively as an industry and with our providers to have document vaults and secure signing, um, you know, um, se secure chats, all those sort of things, the better. And it's a better client experience. So, uh, and I think you touched on a really important point, which is don't think about it as a separate bit of technology. It has to be part of your process. Um, otherwise it will fail. Um, and so to think about it from the client perspective, think about how that integrates with what you need to do, uh, from an internal perspective, um, and, and, and make sure that it's actually a benefit to both parties.

PD:

And it is a, a change management exercise, isn't it? I'm sure you guys have seen that for anything you roll out. Mm. Right. You're gonna have to train clients to make the change, even if they're happy to do it, and you're probably gonna have to almost nudge them to it, even if they accidentally send you something via email, it's like, fantastic. But can you just try it again via the portal instead of doing it all for them? You know, I think we try and make things easier, but that's okay. I'll handle it. But you're not creating change, you're not giving them the new habit so that they're gonna go save via the portal every time,

MH:

You know? Well, yeah. And I've seen some great, um, practises, uh, a adopting really interesting ways to embed that change management. So, uh, when they first come in, uh, uh, for their sort of implementation meeting, they'll actually sit down with the client, help them get the app set up, uh, make sure that the facial recognition's working so they don't have to worry, worry about their pin numbers and, and passwords. Yeah. Um, but the other extreme, and I think this is a great idea, uh, is they get their, uh, more elderly clients, uh, into for lunch and learn. Yeah. Uh, so if you come in for lunchtime, we'll get around, it's a little bit like the Apple, uh, sessions that they run in the Apple stores, uh, and they get 'em all around the table. They have a little bit of a laugh about, um, how hopeless they all are. Yep. But through that, they're showing them and, and they're working together with other clients to say, you know, it's not actually that hard. And they get direct as well on the sort of things that their client said, oh, wouldn't it be cool if, uh, you could do this, this, and this? Uh, so it's a great way to engage with your clients, um, and, and have a bit of fun as well.

PD:

And they had a hu Apple had a huge take up from that gener, the older, the boomer sort of generation because of that, some of them were going every week for another session, you know, and, and nobody else was offering that. You couldn't buy a p a normal PC and get that service. Yeah. You know, so it is a way to differentiate itself. And I guess, um, I'm curious about your take on businesses like say Apple and Amazon. I mean, I know I'm an Amazon Prime member, and my complete expectation now is if I order something, it gets here tomorrow. Like it's just <laugh>, it's forgiven.

MH:

I, I'm, I'm still shocked by it though. Uh, I ordered, uh, some things to my computer. I think it was a, I lost my charger for my Garmin watch, uh, and edited a USB connector for something or other, and it arrived, uh, either that afternoon or the next day. Uh, and it still shocks me, but it's also set that new expectation,

PD:

Hasn't it? And what do we, I mean, th there's so many examples of that. And like you say, in our industry, you know, we're so excited that we're doing e-signatures. I guess I'm curious what you think the leaps need to be, cuz part of maybe the problem in our industry is we do do these iterative developments. You know, we are not sort of making these quantum leaps of what's the next thing? For example, should we be using e-signature at all or should be this some other two-factor or some other authentication method that we should just be moving to instead of, you know, I'm, I'm interested in what, in where we might be sort of almost holding ourselves back a little with some of those decisions.

MH:

Yeah, I think I unfortunately with, you know, with digital signatures, often it's the use case that will dictate, uh, the signature method. Yeah. So there are still, uh, we've do digital signatures as an example for pretty much every form mm-hmm. <affirmative>, uh, there's still certain ones that, uh, legally we have to have a, a wet signature for. Uh, but increasingly as, as we move down this sort of integrated mobile path, uh, if we can avoid a digital signature and just have a accept reject button, uh, that's the way we'll go. A, a signature is sort of an interim step cuz it was convenient and everyone knew how it worked mm-hmm. <affirmative>. Um, but the reality is all we are wanting is to, to get the go ahead, uh, on a piece of work.

PD:

Yeah. Yeah. And so what else do you think, you know, I mean, you guys have spent a lot of time on, you know, even your portal for Netwealth, um, and you know, what people are using. I'm curious what you are seeing in terms of the users and what they focus on a lot. Like, what are you seeing them use and what are some things that you've put in there that like nobody takes a look at. You thought, oh, you know, that was all that effort and then nobody's really utilised it. Was there any surprises?

MH:

So I know, uh, advisors certainly pushing people towards the mobile app, particularly where it's branded and they've got a bit of ownership. So yeah. Sort of our strategy that sort of going down the product, um, side was to make sure it was a standalone bit of tech that people could use regardless of whether they had a net wealth account or not. That was, and still is very, very important to us mm-hmm. <affirmative>. So it's sort of agnostic to, to what we're doing on the other side. Um, but the reason they've done that is, again, it avoids all the issues with logins and passwords, uh, because it's a matter of holding it up to your face. Yeah. Um, the, the one feature that's had the biggest take up, um, is actually the integrated property feeds. So, uh, we launched the product whilst it wasn't quite as big adoption as the, uh, cha G B T app, uh, the, um, I think we had, was it nine or 900, uh, users over the first couple of weeks add, uh, 1700 properties.

So on average two properties, uh, which really just reflects Australia's lover property. Yeah. Um, and the important things to them when we debated this a lot internally was, you know, they wanted to see a picture of the house because they've got an, uh, emotional attachment to it. Um, and whether they agreed with the valuations or not, they could go in there and put in a, uh, owner valuation, uh, if they disagreed with the one that was coming from domain. So property, uh, we thought it was an important part of the, the total wealth picture because it's such a big part of it. Um, but the adoption since then has, has been huge. And it's one that people get most excited about. Um, and I think bank banking, um, is certainly heading in that direction where people just wanna be able to do everything in the one environment and not have to move between mul multiple, uh, applications.

PD:

Yeah. And it's, it's, um, because I get why for, for the institution, I get, you know, it's, well, it's, it's your bank, whatever your bank is, uh, and they, well, that's our app and that's how you log in. But like you say, for the client, it's like, well, but I don't care <laugh>, I wanna just see all my stuff. Right. <laugh>, why can't that be in one place? You know, it's, um, makes

MH:

It easy workshop, I've got the experience, and I won't name the accounting for, um, software. It's, it's one of two <laugh>. Uh, but their view was that rather than building integrated apps themselves, they would just have a huge, uh, exchange of, of different services. Yeah. The problem for that is it worked really well for the accountant. Um, but as a client, I had to go in, load up a receipt in one app, I then had to approve it in another app, and then if I wanted to see if that had been processed, I had to open up the accounting app. And so I just didn't do it. I went back to sending emails because it was much easier. Um, so again, gotta think about it from the client's perspective and, um, and solve the problem, uh, for them rather than what makes it easy for the advisor.

PD:

Yeah. And I think that, I mean, that's the, the thing that I'll be curious about as we go further down, things like the, you know, the actual apps, um, on, on client's phones is, is what does, what else makes it easier? Is it something that'll nudge them when they need to do something? Is it like, what are the features that maybe we don't see as important, but will add immense value to them? You know? And I guess that only comes out of asking, right? It only comes out of understanding where their biggest blockages are or interests, like you say, with the property. I mean, <laugh> of all the things that we could have in there, really, like really, but everybody's fascinated. And particularly when the market's going nuts and a bit a bit berserk, then they're all curious about that. Um, it makes sense. It's

MH:

The one thing every Australian will have an opinion on.

PD:

Yes, exactly. Exactly. Right. Is there any other, in terms of then the, uh, I mean it's not so much productivity, but you know, the customer experience. Are you seeing any more things that could be exciting about, you know, say the next best thing for, you know, the advisor to work on for a client or anything like that, that you're starting to see that technology can add some real value to? Uh,

MH:

Yeah, so there's, there's a couple of things. And, and again, I talk about what we are doing and, um, I do that because what we actually believe in. So we, we do a lot of the research and we see, we think where we, uh, where we see the industry going. So, uh, I think customizable reporting, um, is, is huge. And we we're spending a lot of money in that space to make sure that an advisor can, uh, basically, and we're calling it the advice illustrator. Uh, they can tell the story using our data and, uh, and imagery to explain it, uh, the strategy, how they want to, to the client, and more importantly, how the client will understand it. Yeah. So it could be that you've got a, um, a new client that's not overly literate, uh, that ultimately just wants to see what's my balance over time, uh, what's my asset location If the advisors, uh, just started having that discussion mm-hmm.

<affirmative>, uh, and maybe wants money and money out versus Yeah. Someone that's very sophisticated that's gonna want all the bells and whistles and line by line asset performance report and benchmarking and contribution analysis and some of those things. So I think provi, uh, being able to tell the story the way that you wanna tell the story to the clients that you wanna tell it, um, is gonna be really important. Mm-hmm. <affirmative>. Um, so that, that's certainly coming. Um, and then if you sort of think about ai, uh, I was, I was fortunate to do a, a live interview with the header of, uh, data and analytics, uh, and AI for Morgan Stanley in the US where they, uh, have 16,000 advisors that they're building solutions for. Um, and they're doing some really cool stuff. And, and they've got a arrangement actually with OpenAI, which is the, the engine that sits behind chat share bt Yeah.

Uh, and so they're, they're training. So they've had next best actions for some time. So when an advisor logs into their desktop, uh, and their whole whole theory is that it's man with machine, uh, versus man without, yeah. And so they're not trying to replace the advisors, they're trying to make them as efficient, um, as possible and, uh, put them in a position where they can add the most value. Um, and so next best actions, uh, is when they first log in the morning, it basically says this has occurred overnight. Uh, these portfolios might be out of, uh, balance or range, or you might wanna speak to these clients because they hold X stock. Uh, they can then automatically press a button, email those clients, or, um, arrange a phone call with them. So, you know, that's sort of the first thing that they do when they go in, in the morning where it's heading though is, uh, is, is really interesting.

So they're using the open AI engine, they're training it only on Morgan Stanley data mm-hmm. <affirmative>, um, so can't hallucinate or sort of go off and find <laugh> with wonderful statistics from around the, uh, from around the web. Yeah. Uh, and it'll allow the advisors to effectively ask the engine things like, you know, what, what's, what's better, BHP or Rio? Uh, right. And then rather than having to pull down two different research reports and try and work out what the key drivers are and who's doing well, where it do a full analysis and basically say, um, you know, B H p, uh, is a, is a better option, uh, based on the following things. Um, so, you know, again, potentially saving the advisor 20 or 30 minutes of analysis, uh, almost in real time while they've got the client on the phone. Um, if it's a new client and the client's asking some broader questions, uh, they can then sort of query, okay, how do I open an account for 'em down and automatically walk them through the next steps or, uh, how a particular process works. So really driving efficiency using, uh, the in-house, uh, capability and, um, and the in-house IP around sort of data and, um, and, and research.

PD:

And I think what's exciting about that is it is it actually frees you up to be more human. Right? Exactly. Exactly. That's the best technology. That's what it lets you do, is it lets you be more human, spend more time with them on understanding them and what they wanna do and all of that personal stuff, which is fantastic and the juicy bits, um, because all the rest is, is worked out. Whereas, I mean, when I think back to some of those meetings I've had years ago, when you've got the printed out fact find and you're spending the whole time, like, it's just horrendous. You know, that's not actually engaging with a client <laugh>, you know, so all of these things give you more time to do that. And I mean, for listeners of the podcast, you know, the ensemble platform has behind it that we all type in and we chat to each other on and ask questions. It's has AI behind it. And so when ensemble happens to come out with some thought leadership that you feel, wow, that's exactly what I was just thinking about. Well, it's cause Ensemble AI is listening and they've, they've drawled it all together and said, this is the things advisors want. You know, how fantastic is that, you know,

MH:

And as I always say, the trick is to make sure that you use it in a way that doesn't come across as being creepy.

PD:

Right, right, exactly. It's just insights, you know, it's just actually listening when people talk. Mm-hmm. Um, as opposed to digging through all sorts of layers of awful stuff, you know, yet it's really fascinating. Is there anything else that you can see sort of coming up that's interesting that you guys might have discovered in, in any of your similar visits, like your Morgan Stanley one?

MH:

Uh, so yes, I think you, you're not gonna have a conversation these days, unfortunately, without talking about ai. Uh, I think it, it really is evolving, uh, rapidly. And, um, generative AI is, is incredibly exciting and it's gonna allow us to, to replace a lot of the processes that, um, you know, can take us hours and hours and hours. I've got hundreds of stories that I could share with you already, but co conscious of our time. Mm-hmm. Um, so I think let's have a look at how that evolves. Uh, you know, SOAs are gonna change anyway as a result of Q a r, uh, so how do we use, um, some of the tools available to streamline that even further? Uh, so that, that, that's important. I think that digital experience, uh, providing personalised insights, uh, is critical and not that far away. Um, it's gotta be hyper-personalized, uh, and to, to use a saying that I often use is that we can never forget that the, um, the service levels that a client expects are based on the last best experience that they had. Yeah. Um, and inevitably that will be one of the big tech companies that we all work with in Amazon or a Facebook where uh, they do get that hyper, hyper personalization, uh, at any time.

PD:

Yeah, I completely agree. And I think the thing we've gotta all watch all the time is applying tech to something that's a crappy process just makes it an even, even craper process. Like it's not <laugh>, you know, it's, it's, and that's why the focus on customer experience is so important. Right. You know, that's where we need to have the energy where it just makes it easier and even a better, um, communication. I think that's something that I'm really interested in is how, how can we get better ways of communicating ideas and concepts in, in advice and using smart tech to do that, you know, rather than

MH:

Yeah. Well again, it's chat, chat bt, I dunno if you've tried this one, but, uh, ask it to describe a transition to, uh, strategy to a five-year-old.

PD:

Nice. Nice. Oh, well there's your mission folks. I feel like that's a fabulous way to finish up. We've all gotta go and do that and, and we've gotta learn from this, right? Of how we can communicate better. Cuz that's actually the value we can bring, we can bring that connection with our clients. Um, alright, advice explorers. If you'd like to find out more about how Netwealth works with advisors, you can see the link in the episode show notes, you know where to find them. Um, I hope you got some value out of hearing us geek out over all the future technology issues out there. Um, and having two tech geeks on the microphone. Uh, thank you so much for joining us, Matt and for Netwealth supporting the Ensemble Advice Tech podcast as a sponsor. We really appreciate it.

MH:

Great to be back and always enjoy the chat