The results of Iress’ inaugural Advice Efficiency Survey, which surveyed more than 100 advice businesses, have found successful advice practices are expecting to see their operating models change over the next three years. The new models will be underpinned by technology aimed at streamlining processes and creating more efficiencies.
Additionally, the survey results proved that those businesses that used a single technology platform to produce advice documents saw significant time savings across all key advice areas, including creating statements of advice (SOA).
According to the data, currently the average number of technology platforms used by advisers stood between two and three.
“Advice practices using one technology platform were able to produce basic new SOAs in 6.1 hours versus 8.7 hours for those using two or more technology platforms. By underpinning their operating models with efficient technology, advisers can optimise their processes, provide advice faster, and scale their businesses,” said Rod Bertino, owner of practice development consultancy Business Health.
Iress commissioned Bertino’s firm to conduct the research to rate the sentiment of Australian financial advice practices regarding future growth.
According to Bertino, advisers could be making better use of digital tools to engage with clients at scale.
“The research showed that only one-third of advisers surveyed use digital tools to help visually present information to their clients, and just 13% use digital tools for client education,” he said.
“The survey results also showed that advice practices can create scale by minimising the technology platforms they use. Advisers should look to continually optimise processes, automate repetitive tasks and harness technology to enhance client engagement and increase productivity. This can create scale and boost profits in advice practices of any size.”
At the same time, Bertino stressed that there were some significant differences between the firms based out of a regional/rural location and those in major cities, with the first ones seeing advisers predominantly work from their office, spend less on technology and less likely to be outsourcing to external specialists. However, rural advisers were more confident when it came to maximising their technology systems, with 21% having reported they did not need any additional training or support versus only 6% of the city-based practices.
Rural advisers were also able to conduct more client meetings but only 28% were willing to outsource the management of their IT infrastructure compared to 41% of those based in the city firms.
“The average spend [on technology] is $12,221 per full-time employee in regional-based practices versus $13,310 for those in the city. Interestingly, a quarter of country-based firms did list rising technology costs as their number one technology challenge,” Bertino said.
Discussing how important technology was for advice businesses when it came to address growing compliance and administrative burden, Bertino said that 60% of the surveyed advice practices pointed to these two things as “the greatest impediment to growth”.
“Many advisers could better utilise technology to help meet their compliance obligations – over half of the advice practices we surveyed are still maintaining a manual complaint and breach register and one-third do not regularly leverage their technology platform to ease the burden of compliance audits.”