When at the Forrester Financial Marketing event in New York, I had the pleasure to meet with Alyson Clarke, a principal Analyst at Forrester.  We sat together to discuss and share some ideas about Online Advice Tools. We talked about collaborative tools, simple tools like financial calculators, product selectors, and advice tools. She brought her analyst perspective and I shared my perspective as a technology vendor building richer interface solutions to many of the financial institutions.

Alyson’s take is that people are desperate for financial advice and that their needs are not met today. “Firms should focus on delivering a better customer experience starting by giving clients access to financial advice”, she told me. “The need for advice is amplified by new and complex taxes, pension reforms, turbulent markets, and complicated financial products. Most people can’t afford expert advice so most of them are shifting to the Internet in search for advice.” But advice delivery has not caught up.  Sure you can view your accounts, access general information, apply for a credit card or for a mortgage, and do some transactions, but where is the advice - the personal touch that people need – the collaboration?

Where are the collaborative advice tools?

Alyson stressed that today, technology firms fail to connect advisors to their clients and that there is a huge need for collaborative advice tools.  I could not agree more.  Some companies have already noticed that such collaborative tools could give them a competitive advantage.  In our discussion, I mentioned Vanguard, for instance, who’s using Backbase co-browse to collaborate with their customers.   Co-browsing technology allows a client to share his browser with a company representative who in turn can take control of the client’s browser if requested by the client. Vanguard’s goal is to provide online customers with a personalized experience similar to what they would get in a branch. Today, Vanguard is setting up online meetings with customers, and using co-browse in the meeting to go over forms together.  The customer experience is similar to sitting next to the advisor and filling up the form together in a branch.  National City is also using very effectively another collaborative tool – Online Chat.  A survey they conducted told them that their customers expected dialog online to be as good as within a branch. National City has found that Chat was a good fit for that, as well as for building trust and relationship. Both Vanguard and National City have found that these new collaborative tools reduce the cost of advice, improve the customer experience, built trust in the advice process and financial advisors, and made advice more relevant with better client-advisor collaboration. Even tough collaborative tools for the Internet are now widely available; however, very few are in full scale development in the financial services sector.

Financial calculators are everywhere – but how effective are they?

If collaborative tools are not yet wide spread within financial services companies, simple online tools, on the other hand, are. But they are usually disconnected from the product. In addition, they deliver different customer experiences usually more poor than rich. Financial calculators, including mortgage, retirement, savings, auto, college planning, etc are widely available.  Our study of mortgage calculators from top US banks shows some drastic inequality between offerings.

Fidelity MyPlan retirement calculator is using intuitive sliders to select the retirement age, money contribution, investment, etc. and results are shown in real time.

At the meeting I showed some of the online tools our customers were able to build using Backbase technology.  ABN AMRO retirement calculator is also using sliders and real time update graphs to show results based on choices.

An other interesting concept is the inclusion of calculators as widgets within a personal dashboard. Below is an example of such dashboard and widgets designed for the European bank ABN AMRO.

This dashboard designed for ABN AMRO includes many intuitive financial widgets such as a retirement planner, budget planner, etc. The concept of dashboard allows users to select the modules or widgets of their choice and to visualize the data the way they want.

Faceted search or product selectors are fast becoming the standard in online retail applications – they are still too few in financial services. Product selectors are merely filters that narrow down choices. Bank of America, for instance, is using selectors to narrow down searches of over 400 credits cards they offer.

After selecting your choices, you get a listing of cards based on your criteria, in this case No annual fee with cash back cards.

Vanguard, however, is creatively using drag and drop as selector for its mutual funds & ETFs.

To compare funds, clients just need to drag the funds from the first line down to the second line.

What about the advice tools?

Well, as Alyson said this is what’s most needed.  If I want a new plan or a new financial service, I would like to be well informed, well advised on what I need, based on my personal situation. Too few financial institutions offer these kinds of tools especially within their online channel. We were able to find a few though.

E*trade for instance, is offering advice as you’re building your retirement plan.

You can really tailor your investments based on your needs and goals.  And it’s visually attractive and definitely very intuitive.

In a project designed for ABN AMRO (see dashboard above), a Personal Advice widget was created. Customers can get advice on the listed topics and through phone, email, Chat, text message or Skype.

Some other tools I’ve seen used for advice are interactive videos. ING and Online Insight have some good examples.  They are using videos to educate and guide users. The host then guides the user through the tool providing educational information and advice based on what the user selects or enters.

So why do financial institutions need online advice tools?

It’s first and foremost to improve the customer experience. Financial products and services are more and more complex so there is a real need for education, and online advice tools have proven to be very effective for that. Advice tools will also increase your conversion rates.

There are many benefits to advice tools but today’s implementations only include standalone elements. For a real customer experience you need to consider all the elements you need, how to integrate them with your products, how to add collaboration tools and how all of these will complement other channels.