We all know financial planners need to innovate. The old ways of working simply don’t apply any more. That’s because the economics of advice delivery have changed completely. Advisers have higher client service obligations than ever before, and revenues are under pressure.

The costs of compliance, professional indemnity insurance and licensee fees are all increasing as well.

But it’s not just about the economics. There’s pressure to innovate from clients as well. The COVID environment has fast-tracked the consumer demand for digital experiences and has raised their expectations of all service providers.

That explains why, according to CoreData’s Licensee Research, financial planners now have a healthy appetite for technology adoption and innovation.

The trouble is they’re not getting the support they require from their licensee. In this chart we can see only 45 per cent of financial adviser respondents said they were satisfied with the technological support their licensee provides.

And that support is important to them, second only to compliance support. In fact, it’s one of the key switching triggers causing planners to change licensees.

Around two in five planners say they would switch to another licensee for better technology support. That’s about twice as many who would switch to get better marketing or business planning assistance.

There’s a reason that planners feel unsupported. Technology transformations are hard, especially for small businesses. They can be a distraction from the core operations, and without strong controls can take twice as long as expected and cost twice as much to deliver.

Principles reduce risk

But technology adoption doesn’t have to be a risky purchase for a financial planning practice, especially when you’re guided by four principles.

1. Start with the client, not the technology. How do clients measure utility when it comes to your services? What is it you offer that your clients think is important, and can that be delivered better with technology?
2. Keep the technology stack simple. Anchor on some core software packages and plug in where you can.
3. Don’t customise. Stick with off-the-shelf functionality or you’ll just create complexity. Stick to your knitting – you’re a financial planner, not a software developer.
4. Fast is better than perfect. Your clients are forgiving. They don’t expect perfection. Just get started and keep evolving.

What got us here, won’t get us where we want to go. If you’d like to learn more about the characteristics of the practice of the future, or the licensee of the future, give us a call.

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