This year will see “fewer foreign raiders” – being overseas tech providers – coming into the market, according to a prediction from Finura Group.

The wealth tech consultant is releasing its annual set of predictions for the year, and despite expectations advice business are ripe for overseas capital investment, this may not be the case for tech providers.

Finura joint managing director Peter Worn tells Professional Planner foreign tech providers see Australia’s large asset pool and growth rate as an easy market to penetrate, but the nuances of our superannuation system and dwindling adviser numbers complicate matters.

“It doesn’t take long to dig deeper and look at thematic of shrinking adviser numbers and the tech market is dominated by one or two key players,” Worn says, alluding to the further reduction of adviser numbers over the past year.

He adds the power the platform providers have in Australia is underestimated because it’s not the same way the UK and US industry develops business relationships.

“Platforms are significant players; they own adviser relationships and that’s a little different in the UK – it tends to be the tech providers that have more influence,” Worn says.

Worn adds the US and UK has less of an “oligopoly-style” market which is dominated by fewer key players which is the case in Australia.

“In Australia it’s a tougher nut to crack,” Worn says. “They always underestimate the level of effort to localize their solutions for our very complicated regulatory and technical regime with superannuation.”

Tech and business

Last year, Finura predicted the “bloated” tech market was ripe for a correction which the firm concedes only partly coming true but 2023 will place further stress on those trying to break into the industry.

“We’ve continued to be inundated with new technology and providers coming into the market despite the fact that adviser numbers have dramatically reduced,” Worn says.

“The reality is the total addressable market in terms of financial advisers has been shrinking quite quickly.”

This year Worn expects the financial services sector will find it tough to raise capital and access capital, although he notes this broader trend across all business sectors.

“The strongest business opportunities are getting funded right now, that’s the reality,” Worn says.