Research firm Investment Trends launched its 2020 Advice Technology Benchmark Report, which provides an in-depth review of developments in technology used by financial advisers to deliver advice, covering the impact of best interest duty requirements, innovations in the client discovery process, delivery of scaled advice and new competition in the space.
This year’s report revealed many of the leading Australian advice software and back-office applications are now owned by companies operating across international borders.
“The acquisition of AdviserLogic, Midwinter and Coin — the second, third and fourth most widely used planning applications, respectively — has brought a global perspective to the Australian market for planning application development,” said Ian Webster, analyst at Investment Trends.
“Local advice tech developers are focused on lifting practice efficiency and anticipating future changes to advice delivery models, but over the horizon, there is emerging competition from integrated applications like Salesforce-based Wealth Connect and Intelliflo Intelligent Office from the UK, a trend that is set to grow.
“Now more than ever, advice firms have access to an array of globally available, low-cost digital services to manage their client relationships and augment their advice production applications.”
The report found that globalisation is an emerging theme in the Australian advice and wealth management space, and best interest duty requirements have also encouraged a more digitised and client-focused planning process.
There are also the regulator’s expectations that the “client voice” be explicitly present in advice documents which has triggered significant investment in development.
Mr Webster said Australian advice regulation enforces this global shift in approaches to financial advice services, placing the needs and objectives of the client at the centre of attention.
“ASIC is becoming more involved in providing explicit regulatory guidance on their expectations for meeting best interest and FASEA requirements. This has increasingly turned advisers away from a product selection/replacement mindset towards a more client-centric view, centred around client discovery, strategic goal-based advice and cash flow modelling,” Mr Webster continued.
“The regulator’s expectations that the ‘client voice’ be explicitly present in advice documents has prompted advice tech providers to invest significantly in developing the client discovery process.
“Notable improvements to the client discovery process ranges from dynamic and modular fact-find applications to support for a discovery process that produces a strategy and scope paper that encapsulates the service that will be provided to the client.”
