LISPs should invest in new technology – and good people
Linked Investment Service Providers (LISPs) spending time and money to upgrade their investment platforms should take care to focus on people – and not just technology.
This warning was one of the key insights shared during a recent panel discussion on LISPs at the ABSIP Retail Investors Symposium. Georgina Smith, Head of Distribution at INN8 Investment Platform, lead the discussion and highlighted the current trend of “re-platforming” in the South African LISP space with many providers changing the technology that underpins their platforms to make them more efficient and easier to use. “Today platforms are all about integration, reporting, and making advisers’ lives easier.”
Khanyi Nzukuma, Chief Executive Officer at Glacier by Sanlam, agreed and said investing in technology should enable platforms to attain greater scale, speed, and efficiency. He also highlighted the value of being able to integrate different systems into a single platform. “Integration gives you the ability to package solutions. For example, the ability to package or link life annuities with living annuities.”
Earl van Zyl, Director & Head of Product Development at Allan Gray, agreed that while technology is a great enabler for LISPs it is ultimately their service that determines their value proposition to clients and advisers. He said it is important to strike a balance between those services and interactions that clients want to experience online and those where they want to receive personal attention. “When clients want to do something online, they should be able to do it online. But if they want to call us, we should still have the best people available on the other side of the line. We are not trying to replace that person on the phone with technology. We are trying to combine these things in a way that is right for both clients and advisors.”
Sangeeth Sewnath, Deputy Managing Director at Ninety One, pointed out that advisors still require personal service even as digitisation can make processing or other repetitive tasks more efficient. “[Efficiency] should make more time available for technical, personal service. This is what you must figure out as a platform: What skill sets can you add? For example, around emigration or tax planning. There is an element of the market that you can service more effectively using technology, but the element of personal service is still very real.”
Sewnath added that LISPs have to be very selective about which functions they choose to outsource. “Administration is a commodity. But the service you provide at the front end of that administration and the experience that you provide the client is not. In the future, this is what will differentiate between those who win and those who don’t.”
He said having the right talent in place is just as important when deploying digitalisation as it is when managing investments. “Digitalisation is not just about technology. It is about people. If you don’t have the right people and are just investing in technology, you are probably deploying the wrong technology solutions in your business.”