In the second of this two-part series, Jaskeet Briah investigates how the protection industry can streamline processes to close the advice gap, the use of rules-based logic as part of artificial intelligence (AI) to improve time management, and how the wider financial services industry can engage with protection.
As the advice gap steadily grows, the first article on this topic explored how technology can help the protection sector reach new customers who aren't receiving financial advice, and how data and AI can improve communications with customers.
Often, administrative tasks, such as data entry and chasing forms, take advisers' attention away from providing guidance to clients. However, streamlining processes can prevent dual keying data entry and will speed up laborious work so advisers can instead focus on providing advice.
In recent years, providers have improved application journeys and dashboards for tracking customer journeys, notes Rose St Louis, protection director at Scottish Widows, but providers also "need to be agile" in evolving these tools and processes to produce better outcomes, particularly with new Consumer Duty regulations next month.
"We need to ensure that advisers have full knowledge of the capabilities available to them, and how they can be used to streamline the process and provide the best outcome for customers," St Louis details.
However, Andy Walton, protection proposition director at the Mortgage Advice Bureau (MAB), argues that protection applications are "three times as long as they were over 20 years ago" and mortgage applications are also "far longer than they used to be."
Any documents, such as key facts documents, policy documents or suitability letters, need to be automatically stored on digital systems so advisers can spend more time talking through a customer's needs, highlighting gaps, and finding solutions to those needs, Walton asserts.
"Our technology has significantly streamlined the entire advising process; prepopulating data, automating quotes, and eliminating the tedious task of dual keying, which has been a headache for advisers," he explains.
"We've also automated suitability letters and have a feature that highlights customer needs, visually displaying any gaps. All this information is extracted directly from the fact-find data."
Speed is key
Additionally, speeding up the sourcing and the purchasing of products will offer a "more efficient and streamlined process," adds Stephanie Hydon, director of client distribution at iPipeline.
Allowing clients to update their personal information on customer portals if their circumstances change means advisers can use this data to be more targeted when delivering advice by identifying gaps in people's financial resilience.
Hydon says: "Technology can help to automate out responses to customers if anything has changed in their life, whether that's through an email or a text. That gives a nudge so advisers can then create a workflow off the back of that to then pick up the phone and talk to customers.
"If you were going to do that manually, it just wouldn't happen, and which is why it hasn't happened. That's where data and technology can identify the customers, understand where their needs are, drive that intent, build that education, and then most importantly, build a really fast, efficient process for them to get the cover that they need."
Specifically, rules-based logic within AI cuts down the time taken on time-consuming and administrative tasks to allow advisers to then focus on providing advice, says Nicola McKenzie, co-founder of Dunham McCarthy.
Rules-based logic is a system that applies human-made rules to a set of data to produce an outcome, such as creating a lasting power of attorney or a Demands and Needs document, which has saved Dunham McCarthy "thousands of hours over the last few years."
"Our advisers aren't spending time writing letters. It also allows us to generate a letter to summarise every meeting as well because it's so easy to create them and is not time-consuming," she adds.
"It allows the client to feel more confident in the customer journey because they understand everything, and they've got a record of everything."
However, purely digital journeys don't give customers options to access all the features and benefits that are available when it comes to advice, McKenzie says, as products are "simplified to make it easier to go down the digital route."
"As a business, we integrate a lot of AI in our processes, but not to remove the adviser - there's always a human element in the process because technology alone isn't perfect and human beings alone aren't perfect," she notes.
"It's about combining and complementing the two things together. We need the help of technology, but technology needs the help of us as well."
Increasing conversations
The ongoing advice gap in protection is compounded by a lack of engagement among advisers in the wider financial services industry. However, protection experts argue that technology can be used to weave these conversations back into the advice process, particularly for mortgage advisers.
Technology can be used to assess where mortgage advisers aren't giving protection advice or if there are gaps in adviser knowledge by identifying whether certain elements aren't being discussed, Walton details.
As such, technology can spot trends, judge persistency, and look at product spreads being advised on, he notes. Therefore, introducing KPIs to identify where there are "potential weaknesses in the process for certain advisers, or even at firm level," will inform learning and development support and training going forward.
"Engagement in client portals will help as well," adds Hydon "Customers can put in information and get more of an understanding of protection, so weaving protection back into those processes is where technology will be really successful."
However, McKenzie argues that technology isn't a barrier for advisers to discuss protection; no matter how efficiently technology is being used, it's the mindset of advisers that needs to change for them to discuss protection.
"For mortgage advisers that are not selling enough protection or independent financial advisers that are dismissive of protection, it's not a priority in their process or in their own heads," McKenzie explains.
"I've been running a business for 12 years, and there's been a certain mindset from those that come into the business that were historically mortgage advisers," she says, such as the belief that there aren't enough hours in a day to discuss protection.
"I'm a mortgage adviser and I have the same number of hours in a day as other mortgage advisers. It's not a good enough reason to not discuss protection."
If time is an issue, then recruiting a protection specialist or referring a client to a protection business that does have the right processes in place is the answer, she adds. However, if systems and processes aren't streamlined enough, then working with someone who has the technological capability is the answer.
"It's not about us as the adviser - it's about the clients, and if that's genuinely the case, then you would find a way to make protection happen," McKenzie concludes.
