How meeting in the middle brings you the best of both worlds.
Good advice is hard to come by. And hard to give. Still, in the financial industry, any advice given should be great advice. That is quite the challenge. At Rulecube, we believe the solution lies in what we call guided advice. But we do realize this term may need some explanation.
Advice versus guidance
Legislation in most EU countries differentiates between offering financial information and offering financial advice. Information in this context is generic. It is the transfer of knowledge. In the UK legislation, this is referred to as Guidance. Advice is specific. It suggests what a person should do, given their circumstances. Advice includes recommendations. Guidance can usually be offered freely. Advice requires some form of contract and payment. In many regions, once the contract is signed or a financial product is ‘sold’, the advisor must monitor the validity of the advice. This is usually referred to as aftercare.
This all sounds simple enough. But in reality, it means bringing together thousands of product characteristics, a wide range of legal requirements, and an almost infinite variation of client needs and personal circumstances.
So how can you ensure that every client within your company receives advice that is
- Meeting the client’s needs
A financial advisor is just a person. People have bad days and forget things. Yet as a financial advice organization, you want to save clients and advisors from the impact a bad day can have. And you want to protect your company’s reputation by ensuring consistent quality throughout your services. Guided advice fixes that challenge.
With guided advice, you define an advice framework for your organization and build that framework into your advice and data systems. Both during and after the advice process, the client file is monitored. The guided advice system prompts smart suggestions to the financial advisor and – if you want to – the client. The advisor is taken by the hand. It’s like having the smartest kid in class next to you, whispering answers. These prompts come in the form of Nudges. These are non-intrusive suggestions that help guide the advisor to build the best possible advice. These nudges can be
- Suggestions for questions to ask
- Warnings about conflicting acceptance rules that include helpful calculated numbers
- Indicators that the client may need additional advice
- Overviews of clients impacted by new legislation
- And much more…
At the heart of Guided advice are business rules: definitions of which decisions are made in which situations. Business rules can be simple (if a client is under 18, a credit card is a no) or complex, existing of a combination of calculations, decision trees, and even an AI-based estimation. The beauty is that guided advice then applies these business rules to all your client files, both current and past. You now rely on something other than your advisor to remember client details or to be on top of new acceptance criteria. With the help of client nudges, the system can educate the client and help them make an informed and sensible decision, which in turn helps the advisor.
To be successful with Guided advice, it is crucial that the rules of your advice framework can be changed in the blink of an eye. This is what we at Rulecube refer to as hyper-agility. If you can’t instantly adapt your rules based on your latest insights, jurisprudence, and changes in legislation, you need to review your system components.
Want to get started with Guided Advice?
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This blog shares five success factors with Guided Advice implementation.