Industry figures have warned that advisers are gluing together lots of disjointed digital channels, which they argued can store up suitability problems later for the future.
Mark Loosmore, executive general manager for wealth and technology supplier Iress, said he is seeing a whole host of companies coming to market in the digital arena which are creating “piecemeal” offerings.
“We are seeing innovators build one fraction of the advice process, which is pretty dangerous.”
He argued this can cause problems around suitability, lead to data discrepancies, and even create issues around due diligence.
“There is a whole set of assumptions which could be different for the separate models; it could be asset allocation or economic assumptions.
“If something goes wrong and advisers look at their audit process, then which channel is right? They might all be right but they are not consistent.”
Mr Loosmore said he had seen lot of advice firms build and adopt separate elements without connecting it to everything else.
“The other danger of this is it comes right back to data; if you have got different touch-points with different systems, then which one is collating that data to create one version of the truth? If you’ve got bad data then everything falls apart anyway.”
He said companies need to get rid of the fragments and join up all the channels on a single platform, adding: “Where I worry is when people are not doing that.”
Mr Loosmore said this doesn’t mean innovators have to build everything in one go, but instead need the “foundations and plumbing” in place so their offering can be extended.
His concerns were echoed by EValue’s strategy director Bruce Moss, who said most digital advice start-ups will disappear in the next few years, partly because they will fail create to satisfy regulatory standards.
Chris Williams, digital advice director at Nationwide, also raised the issue.
Mr Williams said: “You have to be really clear what your own advice process is and make sure you deliver it through the different channels in order to ensure the advice process is consistent.
“If you try and bolt things on by adopting and adapting different pieces of kit and technology which can not be customised, then you end up with Frankenstein’s monster.
“But to create that consistency then you start in the right place and work with the technology to ensure it can adapt to your business model.”
Mr Williams has also warned against firms which just buy an off-the-shelf or white label robo-advice service which do not fit the requirements of their business model.
Scott Gallacher, chartered financial planner at Rowley Turton, agreed there is a lack of joined-up thinking.
"One of the problems is that providers, which generally fund at lot of these developments, are trying to tie advisers and clients into their financial products rather than create software solutions that fully integrate with other systems.