The number of financial advisors is expected to shrink by half in just a few years.
At the same time consumers are predicted to begin saving more. Behind this massive shift are companies such as the JDC Group of Dr. Sebastian Grabmaier.
Technological advances decrease demand
In Germany there are roughly 250,000 free financial advisors who provide insurance, investments funds and financing to their customers. But according to a recent study, there will probably be half as many financial advisors as today by 2025. Technological advances are expected to make financial products more effective than ever.
Sebastian Grabmaier is the chairman of the JDC Group, listed on the stock exchange and one of the largest players in the industry with more than 16,000 affiliated financial advisors. He was one of the first to start the technological upgrade of the financial services offers. Since the middle of 2015, he has invested heavily in the so-called “Insurtech” industry (insurance/insurance technology).
In this way, Grabmaier wants to push to consolidate the market further, he said in an interview with die Welt. It’s true that there will continue to be counselors made of flesh and blood, but individual consultation will be increasingly combined with computer technology. In addition, customers will receive the lowest rates.
Creating simple online solutions
A key to providing comprehensive service is for the modern financial advisor to offer simple online solutions, says the JDC boss. Individual services should only be providing if an advisor can create a genuine added value for the customer. This is necessary, for example, in portfolio and retirement planning, and risk management where health issues are concerned.
Through this division with technological solutions, financial advisors can significantly support more customers and bring more products to each person – thus fewer consultants are required. According to Grabmaier, the consultants can also profit from this, as they can make more sales.
The financial app “allesmeins” as a one-stop-shop
The financial advisors from the JDC Group will offer a financial app entitled “allemeins” to their customers. This gives customers an overview of all their insurance and investments on their smartphone or tablet. Here all the contracts are organized, can be easily optimized and new ones added.
The advantage of the all-in-one app against pure online solutions is that the customer remains intact with the consultant’s competency when changing the contract or the provider. In addition, the customer has to specify their data only once.
The JDC Group advantage
Compared to their competitors, the JDC Group has the advantage in size and experience alone. It has more than 16,000 connected sales partners, more than 1.2 million end customers, a stock of more than 4.5 million euros and more than one billion euros of new business per year.
JDC also has more than 50 years of company history in its repertoire. “Every customer who works with us through his consultant knows that we will still be there in ten years, and that his customer data and his future are in safe hands with us,” says Dr. Sebastian Grabmaier.
“This is why there will not be many financial distributors and brokerage pools in ten years if they do not immediately adapt to the digitization,” says Grabmaier.
The share price of the JDC Group has almost tripled since the beginning of 2015. In 2016, operating profit was doubled. In the current year, sales are to grow by around 15 percent to around 90 million euros, while doubling EBITDA to five to six million euros.