At the Financial Planning Association of Australia’s (FPA) Professionals Congress in Sydney last week, Iress’ Commercial Director of Investment Infrastructure, Geoff Rogers, participated in a panel discussion about the role of technology in advice. He joined a group of fellow industry leaders in the explorative discussion, led by Andrew Tunny - Global Head of Growth at Investment Trends. Here are the key takeaways.

Setting the scene
It’s 2022 and the financial advice industry in Australia continues to undergo transformational change. Advice practices are rethinking their strategies, regulators are commencing reviews crucial to the future of the industry, new competitors threaten traditional advice businesses, and growing the adviser pool is one of the biggest challenges facing the sector. At the same time, the advice gap in Australia continues to widen, with research from Investment Trends citing that over half of the adult Australian population have unmet advice needs. And while 1.8 million adult Australians intend to seek advice in the next two years, the perceived cost of advice is a major barrier in turning their intention into action.

Making advisers’ lives easier
Advisers are operating in a very complex industry. Clients' varying needs, the range of products and strategies required to address them, and the research, record-keeping and transactions that go into the advice process mean there will always be a lot of work going on behind the scenes. Advice businesses that can streamline execution by spending less time on paperwork and data entry and more time in front of clients, will be more likely to succeed in the long run. So where does technology come in?

As one of the panel participants said: “The number one predictor of customer loyalty is not how you make people feel, it’s how easy you make their life. When I think about the role of technology in advice, I think about it through this lens.” Technology can make advisers’ lives easier by helping reduce or eliminate friction points, such as booking and reminding clients about meetings, preparing and sending documents, doing file notes, capturing and transferring data. Technology exists to help advisers improve their operations by taking all the simple things that happen persistently through the advice process and automating them, so advisers can work faster and better.

Improving the client experience
A key theme emerging from the 2022 Congress was the role digitisation can play in serving the clients of today and the clients of tomorrow. In addition to improving advisers’ operations, technology can also improve the client experience. One of the challenges is that advice for some clients is not an overly interesting exercise, and there are opportunities to use technology to better engage clients in the advice process, while complementing the human elements that advisers bring to the table (i.e. coaching conversations).

Technology-underpinned solutions can enable advisers to work in a more engaging, efficient and cost-effective way to service clients today, with examples including providing statements of advice in video form. The role of client portals takes on new significance in the current cyber security environment, which is now an issue of national importance and something that advisers need to factor into their current processes and ways of working to future-proof their businesses. There’s also a real opportunity to get digital advice working at a practice and licensee level, integrated within the business, where the next generation of advice clients can go through the digital advice journey.

The importance of industry integration and connectivity

The rate of tech adoption by advice practices is increasing, so what’s not working? There’s some great quality tech out there, but at the end of the day, it’s still taking longer to implement advice and it’s costing more. While the technology available for advisers to choose from might be good in isolation, the big opportunity involves harnessing integrations and connectivity between the various industry participants.

Iress last week launched a ‘Connectivity Network’ that will directly connect platforms and insurance providers with advice software such as Xplan to streamline and simplify the advice execution process, thereby increasing the number of clients advisers are able to serve. Core to the Connectivity Network is the delivery of a new cloud-based infrastructure capability known as Xplan Affinity, which facilitates straight-through processing of client onboarding, trading, insurance applications, advice execution, client maintenance, and reporting.

Top tech principles for advice practices
So what are the top principles advice practices should be thinking about as they look ahead to 2023?

  1. Know your strategy
    If a new piece of technology isn’t going to help you be more efficient or improve the client experience, don't use it. Think firstly about what your clients want, the experience you want to deliver and which jobs you want to do digitally, and then make decisions about your technology.
  2. Due diligence
    Audit all of the technology your practice is using at the moment. Analyse any duplicates and whether they’re still the best solutions for you now. Speak to your technology partner and ask them to help you ensure your strategy and tools are on the same page. It’s also important to work out what you’re spending on technology - produce an itemised report of your tech spend and regularly review this.
  3. Review your data
    Before you think about talking to any tech providers, take a good hard look at your data. Auditing your data quality is the best thing you can do to set yourself up for the future, and the investment of time and cost will pay off.

Iress has been facilitating industry connectivity underpinned by technology, to support advisers in streamlining and simplifying the advice execution process. For more information, visit: