Chief executive Steven Levin confirmed the change of plan on a call this morning (March 8), after an analyst asked for an update on the hybrid advice project.
Levin recognised a need for the service among some adviser clients, but said paying a third-party for an off-the-shelf solution would be costly and complicate a tech stack which already needs to be simplified.
“Hybrid advice is still important to us, and we think it has the potential to be a very important new channel for the industry and to help close the advice gap that we all know exists in the UK,” said Levin.
“We are still developing our proposals here, but we have shifted our approach – originally, the team set out to build a ‘hybrid proposition’ on a separate tech stack with the intention of getting a product to market quickly.”
But now, the national advice firm’s focus is on simplifying its back office.
Levin said the Quilter business is still more complex than it needs to be and that it has not integrated adviser businesses it has acquired as well as it could have.
For hybrid advice to happen, Levin said Quilter needs to be using common IT infrastructure first.
“It’s better to get it right than be fast as this is a long-term strategic opportunity rather than an immediate fix and so my priority is simplifying our advice business and propositions and delivering hybrid advice when we are ready to.”
Quilter has already spent a hefty sum on technology upgrades in recent years.
It said it spent £220mn on its replatforming to FNZ which took place in 2020, though FTAdviser understands this figure does not include the millions more it spent in implementation costs.
Last year, Quilter reduced its technology spend. In its full-year results for 2022 published today (March 8), the company said operating expenses decreased by £8mn, to £472mn.
This included £35mn spent on technology, versus the £41mn spent in 2021.
In line with its decision to de-prioritise hybrid advice, Quilter also said in its results that it was investing in its high-net-worth arm.
Revenue-generating staff base costs increased by 11 per cent to £92mn.
Quilter said this included increasing the number of discretionary managers and the build out of its combined advice and investment service for high-net-worth clients.
“In particular, the group invested in the development of further business activities located in Dublin, Ireland within the high-net-worth segment,” the firm said.