Digital acceleration and greater adoption of technology among financial advisers is driving growth in the UK financial advice market, research has found.
The 2022 Financial Adviser Survey, published today by leading fund data and technology company FE fundinfo, reveals quicker adoption of, and greater investment in, new technology is driving efficiencies, allowing advisers to provide simpler advice journeys for their clients and boost their own business confidence.
This is largely being driven by adviser spend and acceptance of technology as a necessity as the industry moves into a post-pandemic world, with nearly 70% of advisers increasing their technology budgets over the past year, as the vast majority (81%) see the opportunities of greater technology adaption.
More than 70% of advisers said they increased spend over the last year to aid business efficiency, while 41% said they introduced new technology to further support remote working. More than a third (35%) meanwhile said they introduced new technologies to specifically meet client demand. In addition, more than half of advisers (56%) also said technology has provided a smoother or simpler advice journey for their clients.
Increasing supporting technologies
With demand for financial advice at an all time high, cashflow planning tools were the most widely implemented, with 45% of those advisers who have invested in technology in the last year, directing their investment towards this service. This was followed by improvements to client portals (made by 30% of advisers), the introduction of risk profiling tools (24%) and on investment research (23%). Other services adopted for the first time last year included back office systems, customer relationship management (CRM) systems, research tools and portfolio analysis.
The last couple of years presented a unique opportunity for advisers to take an active view of their tech stack. For many, it would have become fairly obvious throughout the period of remote and home working where gaps in their technology stack existed and these would have most likely been addressed throughout the course of the pandemic.
Oli Greenspan, Adviser Sales Director at FE fundinfo
Challenges and threats to greater adoption
While even among the most sceptical of advisers there is a growing awareness of the power of technology (more than 90% review their technology stacks at least every two years), the research found that certain barriers remain to further adoption of technology. Chief among these were a lack of integration between existing products and services (cited by 58% of advisers as the largest barrier), followed by the cost of implementation (50% of advisers) and then finding the right software to complement their existing suite of technology (49% of advisers).
Beyond the practical implications of adopting technology, many advisers also fear several wider threats to their businesses in the drive for greater digital efficiency. When asked what the biggest risk their businesses faced through technology, two key themes emerged, with data theft and online security being cited most commonly, alongside a fear of losing a ‘personal touch’ with clients.
What we can see clearly though, through the financial adviser survey is that an industry which was perhaps unfairly seen as late adopters to digitisation, is not only recognising, but seizing the opportunities presented by a growing range of hardware and software which are bringing greater efficiencies across the board. While the research shows there is still much to be done in bridging existing gaps by service providers and technology enablers, advisers are all too ready and able to invest in technology which will aid their business when it becomes available.”
Oli Greenspan, Adviser Sales Director at FE fundinfo
The 2022 Financial Adviser Survey was conducted in November and December 2021. It consisted of 60 questions and was completed by over 200 UK-based financial advisers.