Reimagining how the work, works – a perspective on advice technology

Having spent over 35 years of my career in the wealth industry, I’m passionate about finding ways to make advice more affordable and accessible for Australians, and far easier to deliver for financial planners and their staff.

Financial health is one of the most important foundations of our overall wellbeing, and done well, it gives people freedom, choice, and a better quality of life. At the same time, I understand first-hand the challenges and pain points experienced by licensees and financial planners, who continue to face regulatory pressures, increasing costs to serve, and time-consuming implementation of advice. The cost of providing advice is increasing, averaging $3,280 in 2022 (up from $2,500 in 2017), which effectively shuts out around 40 per cent of everyday adult Australians[1].

For those consumers that do get advice, the experience is often time-consuming, taking months from the first meeting with the financial planner to when the advice is actually implemented. On average, it takes 8.2 days to implement comprehensive advice, and 21 per cent of financial planners believe they have poor or very poor chances of executing advice accurately[2].

This doesn’t paint a positive picture, and frankly it isn’t good enough – so how can the industry find ways to lower the cost to serve, provide a better customer experience, and engage consumers at scale?

Technology to the rescue?

Technology has long been seen as an answer to making advice more accessible to consumers by helping solve issues such as rising costs, meeting increased risk and compliance obligations, and keeping up with changing consumer expectations around digital experiences. But are we really harnessing the capability of technology to get the material efficiency gains we need to make advice more accessible, affordable and reliable for everyone?

Based on the results from Iress’ Advice Efficiency Survey, conducted with Business Health, what separates the top advice performers from the rest is how much time is spent in front of clients versus time spent on documentation. The research found that the advice practices with more efficient systems for back-office admin, data management and compliance – which helped free up financial planners to spend more time with clients – tend to be the most profitable. What the research also found was that while the use of a particular technology (or function within it) may increase the efficiency of a particular task for an financial planner, if there’s no broader coordination across the advice practice, then the use of this tech could actually reduce overall business efficiency.

Connectivity is key

At Iress, the consistent feedback we get from our advice clients is that they want greater integration and connectivity to support their efficiency and growth. This is echoed by Investment Trends’ 2022 Adviser Technology report, which cites that the use of multiple platforms has reached a 10-year record high, and there’s strong demand for greater efficiency through integration for advice businesses.

Integrations can make a big difference to a financial planners’ practice efficiency, liberating financial planners and their staff from low-value tasks and re-work and resulting in more reliable data, improved data security and an overall improved customer experience. Iress has a deep history of providing standard and custom integrations between our advice generation software and third-party applications and providers, and we’re increasingly seeing opportunities for advice firms to customise their technology environment – connecting applications together to eliminate friction, maintain a single source of truth, and automate processes and workflows.

From an advice implementation perspective, we also know that many financial planners would be interested in technology that integrates platforms and planning software[3], and we’ve been reimagining the experience of our clients to create new, frictionless, and intelligent ways of working that can meet this demand and transform the industry.

If we can support financial planners and their clients to seamlessly connect to a range of industry partners (including platforms and product providers), we’ll be able to help them further maximise practice efficiency, enhance the advised client experience, and ultimately reduce the time it takes to both implement advice and manage regulatory obligations such as DDO and Advice Fee Consent.

Imagine a world where details collected through the client onboarding process could automatically populate platform application forms, removing the need for onerous and error-prone manual processes. Similarly, imagine a world where the advice execution service enabled trade instructions to be provided to platforms via the advice generation software, removing the need to leave that environment to implement the advice. Finally, the last remaining manual element of the advice process would be digitised – and the efficiencies gained from this could then be reinvested by advisers into growing their businesses and reaching more Australians with advice.

The power of community

As a financial services technology provider, Iress is uniquely positioned to build technology that connects various participants in the financial advice industry, so our clients can deliver better performance and in turn, grow their customer base. Through Iress Labs, we regularly collaborate with financial planners and other users of our software to gain real insights on what’s most important to them and together we co-design new functionality that solves the most common challenges in the delivery and implementation of advice. We’re also working with industry associations like the Financial Services Council (FSC), and groups of licensees, financial planners and platforms to develop industry-wide solutions.

And because we know that knowledge is power, we bring together everyone who uses our advice software in the Iress Community, where over 13,000 users of our software can exchange insights on how to make the most of their technology to make a real impact on their businesses and for their customers.

So where to from here?

After almost 12 months at Iress observing the opportunities tech can provide the financial services industry to perform better, it’s evident that there are some great tech solutions out there, but many capabilities are hardly used and financial planners often don’t know how to use what’s there. The advisers who can successfully harness technology to spend more time in front of customers are those who use the tools and capabilities of the tech they already have to evolve how they work.

Similarly, the advice practices which can use technology to increase efficiency, and in turn profitability, are those that do it with a considered and consistent approach that takes into account their business strategy and how tech can support it. If we can collectively use technology to tackle the biggest challenges we face as an industry, perhaps we can make some progress in making advice easier to deliver for financial planners, and ultimately more affordable and accessible for Australians.

Iress has been facilitating industry connectivity underpinned by technology, to support advisers in streamlining and simplifying the advice execution process. For more information, visit: www.iress.com/xplan-affinity.

This article was originally published in Money & Life by the Financial Planning Association of Australia (FPA) - November 2022. Read this article here.