Licensee services for advisers lacking

There is a lack of licensee services being provided in the market as the industry has not caught up with what financial advisers need, according to a whitepaper.

‘The future of technology and data in enabling advice’ whitepaper published by HUB24 found that while there had been a rapid growth in boutique and mid-tier licensees as a result of the mass exodus of large institutions, licensees and advisers were not looking to re-create what was but wanted better solutions.

Fortnum Private Wealth’s managing director, Neil Younger, said they were looking for one that was “detective and more preventative”.

Younger said licensees and advisers were conscious that the current monitoring and supervision was backward-looking and there was a desire to monitor and supervise in a way, so they were not doing annual audits but rather things are being audited consistently. This, he said, would free up resources to do coaching, to improve processes, and to create better client experiences.

Also contributing to the report, XY Adviser, managing director, Clayton Daniel, said advisers’ needs were not being met.

“If you consider the traditional role licensees have played, there is a lack of licensee services being provided in the market. While we have seen the rise of services provided by specialists, I am not sure the industry has caught up with what advisers need,” he said.

Lifestyle Financial Services Gareth Hall also agreed and said: “Tools to help practices meet their compliance obligations exist but these are so broad you need to spend large amounts of money for it to function how you want it to. This approach is not working for smaller firms who have to meet their client needs.”

The paper also noted that one of the greatest challenges was access to quality data as it was estimated that 80% of data produced in a practice was unstructured and held in a variety of data sources. This made it difficult to access and assess against compliance obligations.

It said digitisation of advice practices was a major challenge that needed to be address to support compliant financial advice.

The paper said a solution would be one that could take data inputs from a number of sources and bring it all together in a meaningful way that makes it easy for licensees and advisers to proactively manage compliance obligations.

Commenting, XY Adviser chief technology officer, Adrian Patty said: “There is definitely a need to bring more digitisation and structure to advice data sets.

“Technology can do a lot but there is a lack of useable data. Any rationalisation of data and conversion of unstructured data to make it more useable is a great value add."