In spite of new tech innovations constantly being launched, each promising to solve issues and build business efficiencies for financial advice professionals, many advisers still expect most aspects of financial planning to be delivered by a human in five years’ time.
This is interesting but not surprising, for a number of reasons.
Investment management not the whole story
Much is being made of the growth of hybrid advice, which we at NextWealth prefer to describe as tech-enabled advice.
Investment providers have their eyes on the prize of onboarding investors who individually may not have large assets but who collectively can add considerably to overall assets under management – with tech making the process more efficient than ever before.
Whether this is via professional advisers or direct is yet to play out, but it is likely to be a mix of both.
While investment management is undoubtedly a major issue, tech providers focused on solving broader business issues for financial advisers are flooding the market with new products and innovations.
Building tech literacy into a business will open doors to myriad possibilities.In our report we spoke with 18 providers, from established corporates to wannabe newcomers.
What is clear is that there is no shortage of good ideas, but a major stumbling block is the sheer volume of new products and, fundamentally, a lack of integration with the systems that many advisers are already using.
Financial advice professionals are busy people. They lack time.
Crucially, our report also found that the majority of them lack the IT skills to navigate their way to finding the sort of tech that can help them achieve their business ambitions.
No financial advice business with fewer than 20 employee has someone dedicated to IT.
These companies rely on external support for IT and often lack tech expertise in-house.
Perhaps this lack of tech literacy is one of the reasons why so many advisers say that humans will continue to be central to so many processes for many years to come.
Tech literacy opens a world of opportunities
While many advisers are grappling with decisions around what tech can add efficiencies to their businesses, there are some businesses that are using tech as the inspiration to take their companies in bold new directions.
We feature one such business in our report: First Wealth. Launched in the wake of the 2008 financial crisis, First Wealth was built on strong values and achieved B Corp status in 2020.
One of the business's goals is to make financial planning more accessible to a wider audience and this led them to look at how tech can help them achieve it.
After looking at what already existed, they decided to develop their own solution.
What is clear is that there is no shortage of good ideas.Their initial project had a single and straightforward purpose: to improve the efficiency of onboarding a client into a financial advisory practice.
What is interesting is how this has developed into so much more.
They describe their first foray into taking tech control as possibly being “the tiny acorn that grows the mighty oak”, with ambitious plans for developing new systems that will drive their social purpose and help them build on their aspirations, under the brand Open Advice.
They did not start out as tech savvy: they recognised that getting the right support could make them innovators, not consumers of off-the-shelf tech.
Not all advice businesses will want to go so far but, without a doubt, building tech literacy into a business and partnering with providers who will support that journey will open doors to myriad possibilities, changing the public’s perception of financial advice, and allowing advisers to reach new audiences and make the profession more rewarding than ever.
Heather Hopkins is the managing director and founder of NextWealth
