The Empowering Advice Through Technology (EATT) conference saw Defaqto demonstrate their Defaqto Unity system, designed to replace fragmented tech stacks with a unified operating model.
The all-in-one system offers practice management, financial planning, product research and panels, and compliance in modules, which can be used in conjunction or taken as single units to complement advice firms’ existing tech.
Through the Unity system, Defaqto’s aim, said CEO John Milliken, is to address the frustrations that come from trying to use fragmented practice management, financial planning and client management systems, which despite integration, often don’t talk to one another. Frustrations that can be compounded for firms who are trying to grow their business.
Defaqto Unity’s aim, he said, is to give firms a data foundation, with AI integrated throughout, which aligns data, insight and governance across the advice workflow. “Defaqto Unity is designed to reduce duplication, improve efficiency and support clearer, more confident decision-making, while strengthening oversight and control across firms.”
How paraplanners would benefit
Milliken said paraplanners would benefit from three main pillars that Unity provides.
First, is having access to data all in one place and to be able to have actionable insight from the data. “For example, paraplanners can see if the client has over exposure to a particular sector or asset manager; or if a fund shuts, which clients are affected and to what degree; which clients are coming up for annual review; if a fund is showing signs of not performing should it be highlighted sooner rather than later to the investment committee, with the data to back it up.”
Second, is workflow efficiencies of an integrated, AI-backed system. “If paraplanners can do their job through a single workflow that is going to take them a lot less time, this can increase productivity and capacity, as well as taking away the frustrations of having to use disparate systems to get the work done. It also means the firm has a better opportunity to grow the business, whether that is expanding their current client base or, with targeted support coming on, looking to serve a lower value client base, whether that is the next generation of current clients or widening it out into those in the savings gap.”
The third benefit, he said, is around compliance and quality of business integrity. The ability to check cases at the point the decision is made not after the event. Ensuring the same decision is being made in the same circumstance. And where discrepancies appear, seeing where guidance or training may be needed to deliver a consistent service across the firm.
What effect AI on paraplanning role?
In terms of how AI will likely affect the paraplanning role, Milliken said, there are two areas where it is already having an impact. The first is an improvement in productivity. “There is the facility for machines to do certain jobs very well – such as gathering data, writing reports, making quantitative judgements and maybe even some qualitative ones too, if only on an experiential basis. So they can take away some of the more mundane aspect of the role.”
With AI taking care of those elements, he said, “paraplanners time is opened up to take on other things that are of value to the firm. It allows more business to be taken on, and I think we are seeing more commercial focus on this among larger firms; paraplanners could become more involved with clients; expand the research capability of the firm; undertake more learning to bring greater knowledge and technical expertise to the firm; get involved in the firm’s investment committee; or look to how their skills and talent could be used elsewhere in the firm, such as on projects and in operations. This really does open up opportunities for more exciting roles and potentially, for paraplanners to have greater job satisfaction along the way.”
With the advances in technology and the changes to legislation and regulation, including targeted support, there is “a real opportunity for financial advice to grow, and the firms that will win are those that best utilise their technology and get more value out of their people, rather than use technology as cost cutting exercise along the lines of ‘one day paraplanners aren’t going to exist’” he said.
“We’re not saying to firms that they have to take the entire Unity system and scrap what they have,” Milliken added, “they can take individual modules and use them to complement systems they currently use. But ultimately, firms are going to want to have a system that gives them that unity of data, insight and governance across the advice workflow, to help them simplify decision-making, strengthen oversight and build more resilient businesses.”
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