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Will technologically backward advisers fall out of providers’ good books?

When Money Marketing reported last month on the increase in costs for SimplyBiz services and the removal of free offerings for its customers, some noted advisers were beginning to turn away from the major provider for other technology solutions.

However, last week the compliance giant said its new end-to-end investment solution had been successfully pulling advisers back on side.

Rather than focusing on building complex technologies, SimplyBiz Investment Services managing director Dan Russell says the group is now looking to provide adaptable solutions that meet the changing needs of the industry.

Concerns that more traditional advisers are too costly to process and that their work runs a compliance risk if use of systems is not executed correctly are prevalent.

With the majority of the UK’s financial advisers over the age of 50, Financial Technology Research Centre director Ian McKenna says that the most suitable solution does not have to be the most complex to learn.

In a recent Money Marketing column, McKenna pointed to research showing firms can expect to lose more than 80 per cent of assets under advice if operating models are not reviewed with this in mind. With many people who inherit wealth likely to search for new advisers, McKenna warns that incorrect use of technology systems or offerings that are not suitable for a wide variety of clients will rapidly lose firms their customers.

He says: “There are some interesting trends emerging and we are seeing advice practices where having a number of old advisers who may be very big fee generators but simply won’t embrace technology is beginning to constrict the ability of the advice business to grow.”

Wealth Wizards head of advice Martin Harris says forward-thinking advisers are mostly engaged with a range of technologies, including cashflow modellers, report writing tools and hybrid advice offerings.

He says: “Making tools relatable to advisers is simply down to good design and that includes modern design thinking and thorough user testing.”

McKenna says that firms need to consider whether cutting their losses on some staff would ultimately position them better.

He adds: “If you’re trying to deploy technology across your business and grow your business and there are a few people that won’t use the technology, you don’t get the benefits and it undermines what technology can truly deliver.

“SimplyBiz and others can put really good technology in place for advisers, but they are really only going to get the benefit if the advisers invest their time in becoming fluent in what is offered.”

Deciding on how technology fits into a firm’s operating model is also a major consideration when it comes to attracting new clients.

Harris says: “Some types of technology can significantly increase an adviser’s efficiency, but this must have an effect on the cost to serve, so will undoubtedly affect an adviser’s ability to be competitive in the long term.”

The FCA is also looking to advisers to provide suitable and high-quality advice, rather than aiming to cut corners and deliver cheap solutions.

Studies from the FTRC suggest advisers should use the same consistent process when conducting research into solutions offered as they do on which technologies they will utilise to best meet that need.

The challenge that larger distributors face is whether supporting every adviser within their business is truly cost-effective.

McKenna says: “Some may simply conclude that there are some advisers that are too expensive to support.

“Organisations need to work out if they could be better off with fewer advisers, but ones that use technology to enhance risk mitigation and compliance and all-round services, because if you don’t use technology properly, it can be quite dangerous.”

Harris says advisers will engage with new technology solutions insofar as they see a tangible benefit to their business.

Expecting technology to be “the end-to-end silver bullet” also runs its own risks.

McKenna says: “If you build a process and a technology solution can address half of those, that is a significant difference to how quickly you can do your work.

“Advisers should want to work smarter and when it comes to technology, but it does take time to learn how to get the best out of things.

“Advice is a professional business and it needs powerful software to provide that service.”



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