Two things happened at the end of May crystallised something that’s been nagging away at me for months.

First, PictureWealth, a Perth-based fintech, acquired the Futuro and Insight Investment licensees from Highfield Group; and second, digital advice service Advice Intelligence had entered voluntary administration.

These events might not seem related but given just what different ends of the advicetech story spectrum these vents occupy they illustrate just how difficult it is to assess the quality and viability of technology designed to support advisers and advice practices.

Being invited to write about the latest thing in advicetech is to be on a hiding to nothing. Something might look great but actually be useless and fail; something that seems difficult to use and not apparently very helpful might turn out to be the next very big thing.

The predicament Advice Intelligence finds itself in is bad news for everyone involved: staff, users and the investors who’ve so far pumped in a reported $50 million. Something may yet be salvaged and emerge strong, useful and successful; let’s hope so.

But as Advice Intelligence has shown, a degree of longevity (it was founded in 2016), winning awards and substantial investment don’t guarantee anything if advisers don’t take a technology up in sufficient numbers or at a cost that makes sense; and really, with so many advicetechs that have come and gone over the past five to 10 years, who can blame advisers for wanting to avoid backing a losing horse? Better to wait until others have tried it and it’s shown whether it’s a thoroughbred or a nag.

Advice technology solutions seem to spring from two primary sources. Either they’re created outside the adviser sphere and then brought to advisers and licensees with a list of promises and grand claims; or else they’re developed within the adviser sphere (often by a licensee or a large advice practice) but then struggle to gain acceptance outside that setting and then fail to achieve scale.

That’s not to say a new advicetech can’t succeed from either of those starting points; it’s just that the path to success is different depending on from where it sets out. But any advicetech solution, irrespective of who conceives it, who develops it and who backs it, has to solve an actual problem, not be a solution looking for a problem – or worse, a solution that has to first create a problem that it can solve.

In the PictureWealth example, the company has developed technology that it has been able to develop and fine-tune through its salaried advisers; not it’s expanding the number of potential users to well over 100 by acquiring licensees. PictureWealth is a serial M&A player, so expect further deals to follow.

Just a few days after the contrasting Advice Intelligence and Picture Wealth stories, another intriguing wrinkle in the advicetech origin saga developed. Professional Planner reported on an app developed by Darren Steinhardt’s Infocus. In this case, the technology is being developed at considerable cost to the licensee to address (initially, and among other things) the issue of client fee consent. When it’s ready, Steinhardt will make it available to advice practices free of charge, or at a nominal fee if they want to use their own branding on it.

Despite all of this, innovation in financial advice technology isn’t as advanced as many believe it should be. The task of unseating established market leaders takes time and money and depends on advisers and licensees being prepared to back a newcomer to the space.

And that’s even before we consider the implications and applications of artificial intelligence – or, as it’s sometimes referred to, augmented intelligence.

AI isn’t considered likely to replace human advisers any time soon and so, having said that, you can probably expect to see exactly that happen in the next few months – predicting the path of technology is a bit like that. But it’s already augmenting the advice process in exciting and varied ways. Any licensee serious about being relevant in years to come is already road-testing various AI-based technologies to help support advisers. This will all be part of the debate and discussion at the Professional Planner Licensee Summit on 19-20 June.

Technology clearly and obviously has a big role to play in an advice profession of the future. The tricky part of any forecast is to say exactly what that role will be, to what extent it will support or usurp humans and, no matter how good it is, whether it can succeed commercially.

At the end of the day, the advice industry’s giant leaps towards becoming a profession may be what protects it most: being a professional is all about experience, empathy, technical prowess and – critically – exercising judgement. Some aspects of the advice process inevitably will be taken over by technology, but we’re still a long way off machines being able to exercise true human judgement.

Or are we?

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