The best-laid plans

Smartphones control so much of our daily lives. How could financial plans be broken down for smaller screens?
by Gill Wadsworth


The number of mobile phone users in Japan reached just shy of 100 million – nearly 80% of the population – in 2020 and is predicted to reach more than 114 million by 2025, according to Statista. It is no wonder then that in summer 2020 the Japanese Financial Services Agency amended legislation to make it easier for financial planners to work with clients over digital devices.

Changes to the Japanese Financial Instruments Sales Act have streamlined the regulatory framework for those providing intermediary financial services, including financial planners and online platforms. Under existing laws, licences and other requirements are set out in separate statutes and regulations for each part of the sector, with platform providers required to maintain a separate licence for each area – for example, one for banking and another for insurance.

Under the Act, intermediary service providers can obtain a registration as a Financial Services Intermediary Business Operator. Through one licence, the provider can then designate all the categories in which it will engage. The amended legislation enables a ‘one-stop-shop’.

The move to digitisation in financial planning has been accelerated by the pandemic, said a spokesperson for the Japanese Association of Financial Planning: "Financial planners in Japan are required to digitise documents because smartphones or mobile devices, such as tablets with small screens, not desktop computers, are prevailing. Covid-19 has accelerated this trend. Digital data makes it possible for financial planners to send financial plans to clients without meeting them in person and also allows them to provide presentations through an online meeting system."

Communicating to clients

The starting point is to decide just how far you want your digital engagement with clients to go. For some financial planners, their particular market segment may not necessitate an all singing and dancing platform for a phone or small screen, but the role of digital communications will still prove helpful.

Some financial planners, while accepting of the move, want digital solutions to be flexible and to match their own clients’ needs.

Hamish Leng CFP™ Chartered MCSI, founder of Hamish Leng & Company, a CISI-accredited financial planning firm, accepts that the move to accessing financial plans on small screens is "the direction of travel" but suggests that it may take longer for some firms to get on board.
The financial plan in its current guise may act as more of a deterrent than an engagement tool

Hamish says that they provide an agenda to clients ahead of each annual review, and ask if the client wants an app for their platform accounts: "Most say, almost pleadingly, ‘no I can’t cope’ but others – say 10% – really welcome it."

He says there is a "natural assumption that everyone wants things electronically". However, in practice he finds it is not as much as expected because of the digital information ‘overload’ with which many are dealing.

Yet it is possible to bring clients on the digital journey by engaging them in the process from the outset and making clear the potential benefits and long-term cost savings. For example, since clients should be able to make updates to their personal circumstances using their smartphones, there will be less need to pay planners to do it for them.

Breaking it down

Inevitably, financial planners will need to engage with reluctant clients to help them feel at ease with a move to more digital communications that are accessible on a phone or a tablet. A useful starting point is demonstrating how a financial plan is far easier to understand and digest once it has been condensed.

Often large and unwieldy, stretching to 70 pages, the financial plan in its current guise may act as more of a deterrent than an engagement tool.

Robin Keyte CFP™ Chartered MCSI, director of Keyte Chartered Financial Planners, says that by designing plans to be received over smartphones and tablets, financial planners will not only make the report more palatable but will also reduce their own workloads.

Rather than sending a full financial report, financial planners can instead break up the document into sections, which can be sent separately and then easily read on a mobile device. They could also make better use of graphics to depict information and also shorten the plan, particularly for ongoing process documents.

Robin identifies four possible sections:

  1. Assets and liabilities, including estate planning
  2. Income and expenditure, combined with income tax, National Insurance contributions and protection planning
  3. Retirement planning
  4. Investment planning – this may come under retirement planning for some clients.

However, it is worth bearing in mind that, even in Japan, where digitisation is advanced, there is no real solution to making the financial plan entirely digestible on a smartphone.

The JAFP spokesperson says that when financial planners in Japan digitise plans, they convert the document into a PDF, which is not easy to read on a smartphone without magnifying the text and therefore losing the surrounding context – if the client can only read a few paragraphs at a time it is more difficult to understand the full text.

Keeping it relevant

With the limited screen space on smartphones and tablets, all information in the plan must be condensed to only the most relevant.

Susan Daley CFP® is a portfolio manager at Canadian portfolio management and brokerage firm PWL Capital. She says that communicating through mobile devices can be an excellent way to focus on providing the precise information that the client wants.

Susan suggests prioritising relevant points for clients in a condensed summary, which they can receive on a smartphone or tablet and click through to receive more information or, importantly, take action. She says adding a to-do list with priority actions and less urgent actions can help to make this process easier and not overwhelming.

Overcoming barriers

The benefits of implementing digital communication with clients are clear, but there are challenges in harmonising all the different formats in which client data exists into one single platform.

Gareth Collier CFP® is director of financial planning firm Crue Invest in South Africa, which is testing technology that includes the functionality of enabling clients to update financial objectives themselves when their circumstances change. This empowers clients to see how, for example, a pregnancy impacts on their finances and the changes that they might have to make and when. "So by the time the client sits down to talk to us, they already have a clear idea of what they want and we can talk to them about possible solutions and our recommendations."

For Gareth, the key to managing the technology cost was calling on a network in South Africa – including asset managers – to help share the burden. Crue Invest is part of a group of businesses in South Africa that are partnering with a developer, which has funding from an asset manager. It's one of three companies piloting the new financial planning technology in the country. It is currently a few months away from the initial testing.
"Financial planners should have financial planning knowledge but nowadays they are required to have IT literacy as well"

He says that they receive daily data feeds and client investment information, which Crue’s software developers import into their system, ensuring that it's all correct and compatible with the new software in operation. "The idea is that the data feeds are received from multiple leading investment platforms so client data is up-to-date with what we and the clients can access on those platforms' direct portals," he explains. This will consolidate the information into a single access point to streamline the access to the information. "This will make the planning process more efficient and we hope with the information being more client facing they will engage more often with us."

There are also challenges in accessing suitable technology. Susan Daley says that "[financial planning technology] is not great, at least not in Canada, yet. To condense it into something that is available to easily understand and, particularly, to view on smartphones is a lot of manual work on our end – the technology isn’t there to do that for us."

Finally, JAFP says financial planners need to improve their computer literacy. The spokesperson says: "The mobile device is just hardware; financial planners need to have software skills. It is important for financial planners to be able to use software on smartphones and computers. It goes without saying that financial planners should have financial planning knowledge but nowadays they are required to have IT literacy as well."

A digital future

Despite the barriers, financial planners need to prepare for the inevitable digitalisation of the sector. The Covid-19 pandemic demonstrates how quickly business can adapt – as we covered in a previous Review article ­– and there is a greater expectation than ever before that more can and should be done on smart devices.

Yet the rush to produce financial plans for small screens cannot be achieved at the expense of quality financial planning work and planners will need to balance the needs of their clients with any change in the process. Some financial planning clients may prefer to use tablets or devices with a larger screen than mobile phones.

Although reducing the amount of information being sent out to clients to make it more engaging and less text-heavy is beneficial for everyone, optimising for small screens is just one approach to making financial plans more accessible. Fintech innovations such as Open Banking can help reduce time spent updating a client’s data, and help to provide more tailored services for clients.

Seen a blog, news story or discussion online that you think might interest CISI members? Email
Published: 12 Mar 2021
  • Financial Planning
  • technology
  • Open Banking
  • Japan
  • financial planning
  • Covid-19
  • CFP

No Comments

Sign in to leave a comment

Leave a comment