Advice industry lacking great technology businesses

There are a lot of great advice businesses, but fewer great technology ones which are needed for the industry to better embrace technology moving forward, according to BT.

Kon Costas, head of BT Principals’ Community, said they surveyed the BT Principal’s Community which covered 135 licensees who licenced just under 1,400 advisers across Australia to understand their overall satisfaction with technology.

“With technology being a major cost, we conducted a survey across the community to understand what technology businesses they’re using, their satisfaction [with them], and their cost,” Costas said.

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“It’s no wonder businesses are confused in this space – our survey found that there are over 200 providers which range from advice software through to regtech providers.

“Businesses are spending on average around about $20,000 per adviser on technology alone and this is just for software, not the hardware component.”

Research from the survey showed that adviser businesses saw an overall spend that ranged from about 3.5% to 5%, as a percentage of revenue.

“We’re seeing a convergence of advice and technology – we have a lot of great advice businesses, but not so many great technology businesses and it’s imperative to embrace technology to thrive moving forward,” Costas said.

“In the past, businesses were hesitant to fully tailor their technology solutions to suit their business.

“This has changed dramatically in the last few years, most businesses are doubling down or tripling down on their core systems.

“Technology is achieved [by] creating scale. Average clients per adviser is currently sitting at 110 clients and everyone wants to move incrementally higher.”

Regtech had become a key application and Samantha Clarke, Advice RegTech co-founder and chief executive, said the dynamic had changed over the last few years.

“Originally these types of regtech tools we used for auditing and post-advice checks,” Clarke said.

“The vast majority of users are now using them to pre-vet every single piece of advice to help the advisers get high-quality compliant advice out to market, much faster than they were ever able to before.

“We’re also seeing a lot of in-built consistency and training in these tools, with automatic flags and links to FASEA [Financial Adviser Standards and Ethics Authority], regulatory guides and licensee guides.

“A number of you would’ve noticed Amelia [Constantinidis, FASEA standards director] the other day talking about the importance of not just following your licensee policy and procedures but also being cognizant of the Corporations Act as well.

“These tools by design embed the Corporations Act regulatory guides, as well as the licensee guides.”

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