Duplicate tech systems costly to advice firms

Firms should create a “roadmap” for their technology to reduce buying products which duplicate existing systems.

Firms were using an average of 13 different tools but 38% were using over 15 which included planning software, the investment management platform, mailing system, client portals and a customer relationship management (CRM) system.

However, there were ways for this to be streamlined and consolidated to reduce costs as firms were often unclear on the usage of the various different products.

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Speaking to Money Management, Matt Heine, joint managing director at Netwealth, said: “The average number is about the same as previous years but we are seeing firms buying lots of one-off products as there is so much being developed.

“A lot of products are niche or only solve one part of a problem. Advisers are buying more and more but lack a clear idea of how they are going to use it.

“These often have overlapping features or don’t integrate with their existing products so this is increasing costs and complicating their systems. The average technology cost at firms is $10,000 per employee.”

He said it was important that firms had a “roadmap” before they bought any new technology as to how it was going to be used and what they wanted it to achieve. They should also utilise a client portal to have a digital presence with clients.

“Firms should consolidate and reduce the number of tech products they have into those which are ‘best of breed’ for them,” Heine said.

The level of technology also increased during the lockdown as firms were forced to rely on digital communication to speak with clients.

“Young clients have always wanted to strong digital environment but now we are seeing it become the norm for pre-retirees as well,” Heine said.

“There was a real reluctance prior to the pandemic to adopt virtual meetings but they were left with no choice and the client uptake was higher than expected. It won’t replace face-to-face but it will augment it.”

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