advisor client technology / Blackred

In recent years, there’s been no shortage of conversations about how digital technologies are transforming the way we live and work. These changes have extended far beyond industries like media and retail to touch every sector — including financial planning.

When it comes to technology, things evolve quickly. Even today, it is not clear how the rapid adoption of technology that took place during the pandemic will impact the relationships between financial planners and their clients. However, as time passes, we’re seeing an ongoing preference on the part of many consumers for digital communications and service delivery. And it’s not just among gen Z or millennials — Canadians young and not so young are embracing the enhanced digitalization that came about as a result of the pandemic.

In light of these preferences, we must do more than laud the benefits of technologies such as mobile apps and cloud computing. Today’s approach to digitalization needs to focus on keeping the customer at the centre of the digital strategy.

While many firms and organizations have already taken significant steps on the path to digital transformation, especially in the past two years, there is still significant opportunity for businesses to accelerate further developments. Now, the time has come for the profession to collectively examine the potential impacts of current and emerging technologies on the future of financial planning.

It’s no secret that further digitalizing the profession has the potential to significantly increase access to financial planning services, a shift that could help us improve financial well-being for all Canadians. From reducing costs through increased automation to providing more real-time information to help clients make informed decisions, the possibilities are endless.

Of course, financial planning is, at its heart, about relationships. Fortunately, digital transformation can strengthen connections between financial professionals and their clients — by freeing up time for them to engage on a deeper level, for example — but it also poses new challenges. Increasingly, industry, regulators and consumers need to have a firm understanding of not only the benefits of widespread adoption of technologies but also the related risks, including cybersecurity, privacy and compliance.

To ensure digital transformation benefits all Canadians, we must bring relevant stakeholders together. Exploring emerging issues, defining common objectives and sharing ideas will be key, as will thorough research that helps us understand the implications for professional financial planning.

Industry leaders who are already well along their digital transformation paths will be well-positioned to provide policy recommendations to legislators and help financial planners identify the best digital solutions to meet the needs of their clients. Likewise, planners who have embraced a digital mindset will be better equipped to make full use of new technologies.

That said, the shift towards digital is impacting our entire profession, not just a few organizations or individuals. In other words, we must collectively commit to adopting technology, strategically and in a way that benefits consumers.

This comprehensive approach has informed the creation of the Fintellect Initiative — a joint project recently launched by FP Canada and the Institut québécois de planification financière (IQPF). To ensure there are diverse perspectives, we have created a multi-stakeholder task force devoted to exploring the impact of technology and digitalization on professional financial planning. It’s composed of stakeholders from across the profession including financial planners, academics, regulators and technology experts.

During the first phase of Fintellect, we hosted workshops to explore potential research areas and achieve a better understanding of how we can add value for the profession and consumers. This phase has just ended, and it has been a fascinating process to see the broad areas of discussion, including topics such as the impact of artificial intelligence on the profession, how the regulatory environment needs to evolve to embrace the challenges associated with new technologies, how technology can be used to enhance access to financial planning, and how professional financial planning itself will adapt in the face of technological change. As part of the next phase, Fintellect will take a deeper look at several of these topics, carrying out more detailed research.

In the final phase, the task force, along with FP Canada and IQPF, will use what we’ve learned to empower industry professionals and organizations. Together, we will create resources to help practising financial planners leverage our research. We’ll also explore how our findings should be used strategically by industry firms, regulators, credentialing bodies, educators and governments.

Fintellect illustrates how our industry can work together to realize the potential of technology in more meaningful ways, for the benefit of all Canadians. Digital transformation must be taken with care. As we embark on it, we must balance rapidly shifting consumer expectations — not to mention the fast-paced nature of technological change itself — with the need for fully informed action. Most importantly, we need to make sure that consumers’ interests always continue to come first.

The truth is, digital transformation is a journey — one that will require commitment, perseverance and a willingness to embrace change. Adaptability, continual learning and constant self-improvement will be critical if financial planners are to develop and maintain an optimal mix of digital, interpersonal and technical skills. As a profession, we must be deliberate and thoughtful in our approach, but in a world where digitalization is impacting every element of our lives, we must proactively embrace this transformation.

Tashia Batstone is president and CEO of FP Canada.