Second-guessing the precise nature of future regulatory changes is a foolhardy pursuit, particularly when few have much of an idea of how to satisfactorily close the advice gap. But the viability of other routes can be assessed with greater certainty. It is uncontroversial, for instance, to state that technology will continue to play a growing role in the way that advice is delivered over the next decade and beyond.
Five years ago, this shift was typically viewed as a threat: robo-advisers would unpick the very fabric of the advice industry and ultimately make many superfluous to requirements.
Now, there is more acceptance that technology is both helping change advice for the better and being employed in tandem with, rather than instead of, advisers’ existing practices. There are still question marks over robo-advisers’ ability to provide more than a scaled-back service to clients – and bigger questions over whether any will garner enough assets to be viable as long-term business propositions – but it is existing back-office systems that are truly benefiting from technological change.
And a glance through Money Management’s monthly technology column, which has charted many of these developments, will show that they are not confined to the back end of advisers’ businesses alone. To take another example, the rise of cash flow modelling tools has also given advisers a more reliable way to map out their clients’ financial futures. There are risks to be wary of on this front – in recent years, our Financial Planner Awards’ judging sessions have suggested that some advisers are using such tools as a crutch rather than an aid – but the underlying shift is a positive one.
Smartening up
It is not just technology that has improved advisers’ fortunes in recent times. Their own efforts have also played a fundamental part – and here, too, there is reason to think that this race is not yet fully run.
Alan Chan, an adviser at IFS Wealth and Pensions, says: “We will see more level six qualified advisers and chartered financial planners. This will become the new norm, above and beyond the minimum level four diploma-qualified advisers.”
