Hey Santi, would you mind starting off by telling us about your experience in financial advice?
I've been in financial planning since 1999, from the moment I left university.
In my first job, I was essentially a product salesman. I say this because the advice process has traditionally been anchored in product. In the past, advisers were trained to know what they were going to recommend before the client walked through the door. This is evident from the actions regulators have had to deal with for years.
The turning point for me was when I asked myself a really difficult question. One I’m sure many other advisers have asked themselves:
"Are the clients walking through my door meeting someone who cares for them, who goes out of their way to understand them, but then whose financial guidance and advice is somehow limited to various product recommendations regardless of what the client has shared?”
If your answer to the above is yes then that's not a profession, that's just selling. Lumiant is breaking advisers away from the limitations of product selling and helping them step deeper into a profession of true advisory.
How did that experience lead you to starting Lumiant?
The realisation that the value of financial advice has nothing to do with money was the launchpad for Lumiant.
Most financial advisers inherently love their clients. They spend time getting to know them, understanding what drives them in life. Unfortunately, this entire process is then anchored in a meaningless document called a Statement of Advice and the experience they provide clients is dictated by product manufacturers.
It might be easy to keep a client happy by telling them they're outperforming a benchmark, but what value are you really providing?
If you have money, then the ultimate benefit of that money is giving purpose to that money. There's no better product than purpose.
There's also no financial planner in the world who can pick the next winning product, who can outperform the market. I haven't read a book about one and I'm yet to see research that can back it up. Quite frankly, there are no investment managers who can really outperform the market long term either. So if they can't do that, then why bother?
If, as an industry, we can't control the outcome then what we can do is create the world's best process and experience.
How does Lumiant help create the world's best experience?
With Lumiant, we started by designing the investment experience around the client and not the product. We allow the client to choose their journey and to align their money to their values, to do something that that matches up with their ESG views, their tax positions, their preferences and their purpose in life.
The vast majority of the industry is incredibly passionate about advice and want to help people lead better lives, not sell them better stuff.
Typically, a financial planner tracks about 1 to 2 goals of a client's life, and most of that is held in a notepad in a filing cabinet. That's not as much of an issue when you're competing on product but when your goal is to help manage lives that's not enough.
Lumiant provides a process for generating 8 to 12 goals that are brought to life digitally and can be tracked for dynamic planning, letting advisers engage with the client based on what's important to them rather than what's important to us.
By retraining advisers to deliver on what they already know, we're making the ability for financial advisers to create value more homogenous. It's less about the 'superstar advisor' and how they sell products and more about empowering anyone who has the client's best interests at heart to deliver this process. By removing the reliance on product to equal value, we're changing the game to service equals value.
How do you see API platforms like Basiq enabling the shift from product to purpose?
There's no doubt tech is going to take over. The question is, how do we add a human element to the tech?
Lumiant identifies what really matters to clients and combines this with Basiq's insights on a client's financial position, so that advisers can step into the position of true advisory. What Basiq enables us to do is bring the two together and leverage financial insights to put the consumer in control. Clients can easily give consent to share their data in an Open Banking friendly way and advisers have a reliable source of truth when it comes to understanding that client's financial position.
When you have access to a client's financial position, at any given point in time, and can combine this with what's valuable to them, the possibilities are endless. You can plan dynamically and drive actionable insights that help clients live more meaningfully. With Lumiant, clients can log on, see they're going to live the life they want and that they're living their life closer to their values.
What has the feedback from financial advisers and clients been like?
30 per cent of clients that come into our office are crying. Not because they've lost money, but because they're having a genuinely deep conversation around what's important to them in their life. That's the level of conversation and connection that Lumiant can enable between adviser and client.
From advisers, I've received some of the most humbling comments in my life. Comments around how Lumiant is the platform they've desperately needed for so long to get passion and purpose back into their lives and change the job to profession.
The fact that we haven't even scratched the surface of what we can deliver yet and are already making a tangible difference in the lives of clients and advisers only speaks to the value of financial advice.