The research firm’s 21st edition of the Adviser Technology Needs Report found that advisers are demanding greater technology integration for their practices as they consolidate their tech stacks.
Advisers are primarily focused on technology with user-friendly client portals and improved reporting for non-custodial assets, with larger practices, especially those with five or more advisers, more inclined to increase their technology budget for these benefits.
The report found that advisers, on average, are spending $37,000 on technology per year but are planning to increase spending by 6 per cent to $39,000. Larger practices are also planning to boost their spending by 8 per cent, to $91,000 per annum.
Speaking on the findings, Ludovic Sevestre, associate research director at Investment Trends, said platform providers need to remain flexible to utilise future technological advancements and the needs of advisers and their clients.
“Advisers recognise the need for seamless integration across their technology platforms to enhance client experience and operational efficiency. This integration is crucial for delivering accurate financial advice, allowing advisers to focus on client relationships and planning,” Sevestre said.
“For providers, the opportunity lies in developing systems that adapt to future advancements, driving growth and client satisfaction.”
Cyber security remains a key concern for advisers, with one in five (21 per cent) rating security among the top three most important factors when choosing an investment platform, surpassing brand and education.
While many platforms have implemented security measures, such as multi-factor authentication, anti-malware software, and strong passwords, 36 per cent of advisers still rate their practice’s cyber-readiness below seven out of 10.
Sevestre explained that advisers are concerned about the security of their technology and are leaning towards technology that offers greater protection.
“Security is paramount in protecting client data and maintaining trust. Advisers are increasingly prioritising cyber security in their technology investments, recognising it as a cornerstone of their service offering,” he said.
“Providers who focus on robust security measures will safeguard client information and reinforce their reputation for reliability and trustworthiness, essential for long-term success in the financial advisory sector.”
Looking at how advisers are using AI, the report found that adoption of the technology is on the rise, with 37 per cent of advisers already using AI tools to improve practice efficiency, and a further 43 per cent have expressed interest in the technology, contingent on support for implementation, security, and privacy concerns.
Among those already using AI, the most common uses are for editing (42 per cent) and customer service (33 per cent). These are followed by reporting, 17 per cent, research and modelling, 16 per cent, data analytics, 14 per cent, and practice management, 12 per cent.
The least common areas of use were cyber security (9 per cent), risk management (5 per cent), and investment selection (3 per cent); however, they were still areas of interest, with almost 20 per cent of respondents indicating them as areas in which they wish to see AI advancement.
Sevestre highlighted how advisers are looking to use technology and AI to increase efficiency within their practices.
“AI is transforming the financial advisory landscape by automating routine tasks and providing deeper insights through data analytics. Advisers who embrace AI will be well-positioned to offer more efficient and personalised services to their clients, gaining a competitive edge,” he said.
“Providers that develop AI tools to enhance client interactions and strategic decision making will lead the way in this evolving landscape.”
