What tech set-up would financial advisers ideally want if they could start again with a clean slate and no legacy systems? That was the hypothetical question we asked for Platforum’s latest report, UK Financial Advisers: Planning Tools and Systems. We gave them four options and compared the results from 2021 and 2019.
Option 1: Financial planning suites linked to separate back office system
Advisers’ interest in financial planning suites linked to back office systems has more than doubled from 17% in 2019. End-to-end financial planning suites were not as widely available and embedded in the market as they are now. Advisers can now see the point of them.
Progress in developing open APIs and integrating back office and other systems could also have changed advisers’ minds. Most end-to-end financial planning suites can now talk to the major back office supplier systems, allowing advisers to work with a single data source. Even without links with back office systems, the planning suites streamline the advice process by integrating client data across their own joined-up tools.
Option 2: Single systems spanning financial planning and the back office
In contrast, advisers are much less keen on solutions that bring financial planning tools and the back office into a single system. In 2019 some 42% favoured them, compared with 20% in 2021. Advisers now associate such completely closed ecosystems with vertically integrated companies and regard them as a threat to their independence. Most advisers are also sceptical about whether a single system can cope with the complexity of a compliant advice process.
Option 3: Buy and integrate the best of breed off-the-shelf software
Buying best of breed for each function off- the-shelf has been supported by a consistent proportion of roughly a fifth of advisers since 2019. Advisers favouring this approach tend to want more control and scrutiny of the tools they select, but they don’t have the time nor inclination to invest in designing their own software. These advisers are more likely put up with devising their own workarounds to overcome poor integration than tolerate tools that do not meet their standards.
Option 4: Design propriety software that suits the needs of your firm
Adviser interest in this DIY approach to tech has also consistently hovered at around 20% since 2019. Advisers adopting this strategy need a clear idea of the tech they require, have clear business processes and understand how they will use the data from their systems. This approach to tech advisers spending much more time, money and resources to get it right, including hiring external software developers. So we think that advisers’ hypothetical interest in could be rather greater than their likely take-up in reality.
Whatever their strategy, advisers are looking to harness greater efficiencies through technology. They may have differing opinions on how that goal can be best achieved, but advisers generally agree that tech holds some promise towards increased adviser productivity.