Tech helps service less profitable clients

One-quarter of financial advice businesses say the use of technology has given a greater ability to deal with less profitable clients, according to research.

Netwealth’s upcoming 2021 AdviceTech Report found this was higher (26.7%) for advice businesses that were the most effective adopters of advice technology.

On the client benefit side, the report also found technology improved the quality of advice (32.2%), improved affordability of advice (28.2%), improved client satisfaction (38.8%), allowed more time to be spent with clients (41.1%), and improved client engagement and communication (59.8%).

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Business wise, 47.1% of respondents said technology gave them the ability to scale and grow their business, 34.5% said it improved profitability, 43.1% said it improved their ability to manage compliance and governance, and 59.2% said it improve efficiency.

Netwealth noted that a digital experience was more than a Zoom meeting as the client experience should be digital-centric, challenge the status quo, and look to digital disruptors for inspiration.

Client data, it said, needed to be the core of advice tech stacks and that practices needed to learn how data could be brought together and leveraged to created new services and deliver improved client and business outcomes.

On managed accounts, the report said while traditionally it was seen as a way to improve practice efficiency, it could also provide better client outcomes.

Netwealth’s report also pointed to finfluencers and said advice firms needed to educate clients with content marketing and not let “finfluencers eat your lunch”.

“Today there is a growing trend where financial influencers [finfluencers] who often aren’t advisers are vying for the attention of your future clients. Understand how you can take advantage of this trend,” it said.

With an emerging affluent cohort on the rise, the report said while they valued financial advice they often did not know where to start and that advisers needed to evolve their value proposition to appeal to this future market.

A growing number of practices are:

  • Spending more time with clients (41.1% compared to 31.9% in 2020)
  • Seeing improved affordability of advice (28.2% compared to 21.1% in 2020)
  • Experiencing growth in client numbers (36.8% compared to 27.0% in 2020)
  • Generating growth in revenue (35.1% compared to 27.6% in 2020)


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