Why advisors need change to develop best plans for clients
Forget how the banks narrowed their product shelves to prepare for client-focused reforms. You should focus instead on how to convince them to opt for open banking, so you can more easily assemble all of your clients’ financial data to develop their best financial plans.
That's the view of Clay Gillespie, a financial advisor, portfolio manager, and managing director of RGF Integrated Wealth Management in Vancouver. He told Wealth Professional: “What is the last number I saw? 75% of wealth management is controlled by the chartered banks. But, we’re one of the only G7 countries that doesn’t have open banking yet.”
Gillespie said open banking means that you can get all the financial data that various banks and financial institutions now control assembled in one place as opposed to what many advisors and clients are doing now: data scraping to pull together what they can.
“People need a consolidated view, and they really want a consolidated view of their affairs,” said Gillespie, noting that banks already consolidate that information in their own institutions.
He said that banks narrowing their product shelves for client-focused reforms was to be expected because they must increasingly monitor everything, but what’s more frustrating is they’re holding onto everyone’s data so it can’t be consolidated in open banking.
“I think we need to have access to all of our data,” said Gillespie, noting other countries, such as Australia, the United Kingdom, and United States allow it, so clients have one consolidated snap-shot of their accounts, investments, RRSPS, TFSAs, mortgage, and insurance. That provides them with a real-time holistic picture, which isn’t an easy option for Canadians now.
“Everyone wants to know how they’re doing. But, who’s got time to put a spreadsheet together?” said Gillespie. “We need something where you can just click here and get your credit cards, your investments, and your line of credit, so you know if you’re getting the best product. I just want to make sure that consumers have a choice beyond the bank mortgage, the bank investment, the bank credit, and all that kind of stuff.
“We’re so far behind the rest of the world on this topic, so I hope we get there,” said Gillespie. “I want to be able to consolidate all the different stuff for advising, but consumers should have the facility to access that themselves, if they want it.”
Having that consolidated view would allow advisors to provide better advice than just relying on clients to provide individual, and sometimes outdated, financial statements, he added.
"My bias is that they could just log in here and it’s all in one place they can see,” he said.
“The days of just putting in their investments and hoping for the best are gone. Now, you’ve got to make sure it fits their entire financial plan. It’ll make us better at what we do, and the clients will be better off, too.”
