Compliance and ongoing regulatory changes remain the greatest challenges for financial advisers in Australia, according to new research.
Investment Trends’ latest 2022 Adviser Technology Needs report — which looked at the evolving technology needs for planners — revealed that compliance burden (65 per cent), the ability to provide affordable advice (41 per cent) and regulatory change (40 per cent) continue to be the biggest challenges for advice businesses.
The study reported that as advisers continue to use new solutions such as client relationship management systems (CRMs) and standalone modelling tools, they are demanding a better integration between the systems.
“Affordable advice is a key concern across the industry, with advisers looking to technology solutions to support their ongoing compliance and client engagement,” Investment Trends research director Dougal Guild said.
“Greater integration can make a material difference and has also been proven to boost confidence levels.”
Two-thirds of advisers who participated in the research firm’s report said they would use an end-to-end solution to minimise delays and errors that they currently experience between advice delivery and implementation.
The research also found that as advisers and practices increase the adoption of technology in their businesses annual spend on technology has risen from an estimated average of $146,000 to $216,000.
“It’s encouraging to see advisers’ rising adoption of technology solutions. However, with this comes an increasing need for greater integration and standardised industry solutions to increase practice efficiency while minimising the time spent on compliance,” Mr Guild added.
“It’s assuring to see advisers’ rising adoption in technology solutions and intentions to increase annual spend on these solutions going forward, making the advice preparation and implementation process more streamlined and effective.”
The research follows a recent episode of the ifa Show podcast where financial adviser and co-founder of Plutosoft, Vincent Holland discussed the industry’s growing interest in digital and recent debate about the role of robo-advice in the sector.
“I don’t think digital tools are going to replace the adviser. I think that’s often been talked about as a threat. I don’t think that’s going to happen,” he said.
“I think it’s more, how can advisers use technology with their clients to make that advice process more seamless and to make sure that they’re actually spending time on adding value for the client.”
Listen to the full podcast with Mr Holland here.
Nothing will change until:
(a) ASIC employ individuals who are suitably and appropriately educated, experienced and qualified to conduct analysis, surveillance & rulings over those of us who actually are
(b) The government & ASIC ask consumers what they want and how they want it
(c) Practices from overseas are actually studied to learn from others’ mistakes over the years in regulation
Red tape regulators and bad regulations = Massive client blockers for advice
Michelle Levy = Time will tell
Unfortunately no-one gives a stuff about the poor adviser. The situation is going to get worse until all advisers except a few large organisations are ‘complied’ out of the industry
Until the policy makers spend a month or two inside a Financial Advice practice and find out first hand the day-to-day compliance burden from day 1 with a new client all the way to managing accounts when markets tank, they will never truly grasp the need to make radical change to the regulatory requirements that hinder advisers and prevent us becoming truly professional in the eyes of our clients.
I can’t see that happening – the people with the view from the Ivory Tower I believe already knows everything and are full of wisdom – no need to actually learn anything perhaps.
I am sure my clients accept financial advisers as being professional. It’s the wider community, ASIC and AFCA that need to fall into line…