Digitizing advice for financial distributors

The role of financial distributors has evolved significantly over the past decades, from aggressive sales models in the 1980s to today’s customer centric and compliance driven approach. What has remained constant is their ability to offer customers financing, investment- /asset management, and insurance solutions from a single source.  This approach continues to align well with how customers think about their finances and has contributed to strong growth in commission revenues in recent years.

At the same time, financial distributors are under increasing pressure to digitize their advisory processes. This is driven both by customers expecting seamless digital experiences across all channels and by regulatory requirements that are becoming harder to meet with manual processes.

Financial distributors have adapted their strategies in the past, showing that distribution models can evolve while supporting growth and maintaining regulatory compliance. Based on our experience, these are the key points to consider when digitizing financial advice:

1. Maintaining quality of advice & regulatory compliance

The first step of the advisory is always the collection of comprehensive financial data (personal goals, existing contracts, financial assets, etc.). This data is essential for personalized advice and serves as the foundation for any advisory process. While future initiatives like FIDA could reduce manual steps, today data collection remains fragmented. Data is collected through interfaces, advisor-specific tools and processes or even on paper. This limits traceability and complicates consistent, high-quality, customer-centric advice and structured X- and Up-selling initiatives. Assessing the customer’s status quo by collecting structured data is essential to unlock this potential. Intuitive digital solutions can make this process simpler for the advisor and more fun for the customer.

Digital tools further enable advisors to match the customer’s status quo with suitable products through pre-defined journeys and algorithm-based recommendations, while embedding regulatory requirements (e.g. IDD & MiFID) into the process. An example that combines those points in investment advisory is the appropriateness & suitability test. Based on parameters such as investment horizon, risk appetite and so forth, either a unit linked insurance, or a brokerage account can be recommended. This helps maintain consistent advisory quality across a diverse and often independent advisor network, while bridging knowledge gaps in areas where advisors lack experience. Relying on tried-and-tested advisory solutions (adapted to individual needs) enhance transparency and credibility, fostering trust with customers.

2. Considering diverse advisor experience & qualifications

Advisors have different levels of experience and qualifications, meaning their needs in a digital advisory process can vary significantly. Regulatory requirements (e.g. financial advisor vs. Insurance advisor vs. trainee) further restrict who can offer certain products or services. Less experienced advisors may need heavily guided advisory processes, while experienced advisors may find such structures cumbersome. Digital solutions must be flexible enough to support both, while allowing for different roles to collaborate. For this to work, they should be closely aligned with training and onboarding programs to ease adoption. Early involvement of advisors in the development process ensures that digital tools align well with existing sales strategies and avoid unnecessary complexity.

3. Building & maintaining product interfaces (quote 2 contract)

Financial distributors operate across a wide range of products, including financing, investment- /asset management, and insurance offered through multiple partner institutions. This multi-product environment creates technical challenges. Advisors prefer quote 2 contract journeys to be directly integrated into the digital advisory solution, limiting system discontinuities. This approach is however not always feasible, leading most financial distributors to rely on external platforms (comparison providers). Recent consolidation among platforms has opened additional strategic complexities, forcing some distributors to decide whether to rely on competitors or invest in proprietary solutions.

When choosing the latter, financial distributors need to carefully assess the cost-benefit of each integration, prioritizing high-frequency products over less critical offerings as well as product partners that can deliver on the interface needs. A strong framework built on reusable components can reduce interface complexity and costs. However, integrating and maintaining interfaces remains costly and technically challenging.

4. Considering continuous advice & self-service

Today’s customers expect seamless digital experiences. While the acceptance of digital solutions may vary by customer type, they ultimately want real-time access to their financial information through the channel of their choice. Despite this, many financial distributors still rely on static PDFs that provide only a snapshot of a client’s financial health at the time of their last advisory meeting.

A well-executed digital advisory solution, fully integrated into the CRM system, enables continuous customer engagement throughout their financial lifecycle. Self-service components, whether in an app, portal, or proactive campaign, allow customers to interact digitally and proactively with their advisor rather than just reactively.

A truly integrated 360-degree customer view, tracking evolving needs and financial progress (e.g., goal achievement), empowers advisors to engage more frequently and meaningfully. This not only enhances customer satisfaction but also creates natural opportunities for x- and up-selling, strengthening long-term client relationships.

5. Managing limited IT resources & fragmented legacy systems

Financial distributors typically rely on several key systems: a) CRMs; b) advisory systems, which can be analog, digital or both c) quote-to-contract systems, usually in the form of external platforms; and d) commission management systems. However, a robust multichannel offering is often lacking. The IT landscape is often fragmented and consists of both self-built and third-party solutions.

The fundamental dilemma, when building a digital advisory solution, is choosing between:

• Integrating into existing advisory steps increases interface complexity and maintenance costs due to tightly coupling applications that have overlapping functionality. This can range from aligning terms and definitions across different solutions to deeply integrating mandatory control functionalities into workflows
• Replacing legacy processes requires significant upfront investment and process adaptation. However, this approach offers clearer functional boundaries between advisory services

Additionally, keeping digital solutions compliant with evolving regulations adds further pressure. Balancing compliance with usability demands continuous investment in infrastructure and regulatory updates, often a challenge given limited IT capacity. While outsourcing can help alleviate pressure on internal IT resources, effective internal IT project management is crucial to ensure successful outcomes.

6. Building in scalability across markets

Some financial distributors operate across multiple markets, increasing complexity while also creating opportunities to spread implementation costs and leverage synergies. For a digital advisory solution to succeed across markets, it must strike a balance between adapting to local preferences and scaling efficiently across geographies. Solutions often struggle to gain traction when business units feel that processes are imposed from a group level without sufficiently accounting for local realities. It is therefore important not to underestimate differences in sales strategies, approaches, and market preferences.

A scalable solution that remains adaptable, while taking advantage of synergies, should maintain its core functionalities while allowing for necessary regional adaptations in areas such as storytelling, UX/UI, content, and regulatory interpretation. This can be achieved by designing for scalability from the outset, building a modular, API-first architecture. This structure enables flexible use of individual components, making it easier to scale digital solutions while adapting to varying needs. Additionally, maintaining a unified technological core allows for x-market analytics and insights, supporting strategic decision-making.

Conclusion

Financial distributors stand at a crossroads. Their ability to offer financing, investment, and insurance from a single source has been a key strength, aligning with how customers naturally think about their finances. However, the increasing complexity of regulatory requirements, evolving customer expectations, and fragmented IT landscapes present significant challenges. Successfully digitizing advisory processes is no longer a competitive advantage, it is a necessity for long-term viability.

The path forward is not just about technology but about strategy. A well-executed digital advisory solution does more than digitize existing processes; it enhances the quality of advice, embeds compliance into every step, and strengthens long-term customer relationships. By integrating self-service capabilities and ensuring seamless advisor-customer interactions, financial distributors can move beyond transactional sales and toward continuous engagement. The goal is not just efficiency but relevance, staying connected with clients across their financial journey.

At the same time, financial distributors must balance standardization with flexibility. Advisors have diverse qualifications and expertise, requiring tailored digital solutions that support structured processes for less experienced advisors while allowing freedom for those with deep expertise. Similarly, multi-market distributors must strike the right balance between local adaptation and scalable solutions that drive efficiency.

Digitization is not a one-time project but an ongoing commitment. It requires careful planning, prioritization, and investment, not just in IT infrastructure but also in training, onboarding, and change management. The cost of maintaining outdated, fragmented processes will only increase as regulatory requirements and customer expectations continue to evolve.

Financial distributors that embrace digital transformation strategically, integrating technology into their advisory DNA rather than layering it onto legacy processes, will be the ones who thrive. Those who hesitate will face mounting challenges in a market that is rapidly moving forward.

Authors

Sebastian T. Ratcliffe & Benedict Jaklitsch