The rapidly changing face of financial advice has left some licensees struggling to keep up with the needs and demands of the advisers they authorise. For some, the evolution of advice and an inability to adapt means their medium- or long-term prospects are potentially bleak. If the most valuable thing they offer to advisers is an AFSL, or a standard set of largely administrative services, they really don’t offer anything at all to set them apart.

As advisers’ needs and the needs of their clients change, licensees need to change to remain relevant and to add value to advisers’ businesses and to their advice. Clients of the future don’t necessarily look like the clients of the past, particularly as a wave of baby boomers approach the retirement shore. The advice support and the business services advisers will need to deliver doesn’t necessarily look like it did in the past, either.

When asked, most licensees say they’re adapting to the needs of advisers, but CoreData Research senior consultant Grahame Evans says the only people who really know if a licensee model is relevant and truly supportive of advisers are advisers themselves.

He urges advisers to take part in this year’s research to make sure licensees get the message, so they can identify what needs to be improved and take steps to do better. But if advisers remain silent, nothing will change.

Understanding advisers’ needs more deeply

Evans says the annual CoreData Licensee Research reveals the strengths and shortcomings of licensee offers through the eyes of advisers. For this reason, it’s invaluable for licensees seeking to support advisers better and understand their needs more deeply, and advisers’ needs are driven by the demands of clients.

“[Clients] are moving very much towards being involved in the process,” Evans says.

“We’ve moved from a world in the old days of advice of ‘tell and sell’ to an environment of ‘uncover, discover’. They want to be part of the decision, and they want to understand what is going on and own that decision, rather than being in this vacuum and just purely trusting advisers.”

Evans says this change has fundamental implication for the systems, processes and support advisers need from licensees to deliver relevant, timely and valuable advice. But without tapping into the insights of advisers and understanding how the client relationship is evolving, licensees are fumbling around in the dark.

If advisers don’t tell licensees what they need, they can’t expect anything to change.

“We can use AI to produce statements of advice and improve efficiency,” Evans says, but that’s focusing on the wrong thing – or, at least, not on the bit that is of most value to clients.

“Licensees have in many cases provided administrative processes around compliance, collection of revenue and continuing professional development,” he adds.

“But the focus around the client engagement process becomes more important. The licensee needs to start thinking about moving its focus from just the back office, if I can call it that, to work with advisers to embrace the client’s experience. They need to do more of that and get better at it.”

Giving licensees a clearer view