Jaime Johns (left) and Peter Worn

A look at what technology advisers in other countries are using can provide some pointers to where the Australian market is headed.

Unsurprisingly, the first place to turn is the US. “The US remains at the forefront of technology development, with the largest addressable market in terms of asset pools, adviser numbers and venture capital availability,” Finura Group joint managing director Peter Worn told Professional Planner.

“By all these measures, the US market is approximately 20 times the size of Australia. Like other technology fields, Australia’s policy settings, tax system, talent pools and risk appetite are less favourable to startups.”

Worn noted that in the US, advisers are fast embracing easy-to-integrate enterprise-grade customer relationship management (CRM) systems. Indeed, research by US financial planning commentator Michael Kitces revealed that nearly 60 per cent of US firms with 10 or more advisers use Microsoft Dynamics or Salesforce.

“Many of these firms invest further in these solutions through customisation or third-party developers,” Worn said.

“Rather than planning CRMs as we see in Australia, planning tools purely perform the job of advice generation.”

He added that nearly 90 per cent of US firms use specialist performance reporting and data aggregation tools.

“In Australia, there is an expectation that the financial planning CRM performs the function of data aggregation,” he says.

“The quality of data feeds between platforms and planning software is a constant pain point for Australian advice firms. In the US and UK, specialist providers of data services open the technology ecosystem by allowing other technology solutions, such as planning tools, reporting engines and client portals, to access them.”

Worn said many start-ups entering the US and UK advice tech market claim to have artificial intelligence (AI) capability.

“However, in 2024, a more measured approach to AI is being considered – in the US, the Securities and Exchange Commission is already gathering feedback from advisers on how they are considering using AI with the prospect of regulation on the horizon,” Worn said.

“What is more likely in the near term is that major custodians, CRMs and client analytics platforms will incorporate AI-driven chatbot interfaces, which will improve the adviser’s experience for quickly analysing large amounts of client data.”

Beyond data analytics, Worn saw immediate “use cases” in content generation, automation via robotic process automation and the wide-scale adoption of productivity solutions through Microsoft Co-Pilot.

“In the UK and US, we still see a strong appetite for robo-investing platforms,” he said.

“These platforms are increasingly looking to AI to offer more customised solutions to individual investors and improve client acquisition through direct marketing. However, like in Australia, the business model of these robo platforms is yet to be proven.”

Avanzare Group managing director Jaime Johns said there’s a lot more innovation in the engagement space overseas than in Australia.

Here, she cited examples of advice technology, such as SigFig, (used in the US, Canada, UK and Singapore), Asset-Map (used in the US, UK and South Africa) as well as EV or EValue and Ningi, both of which are used by advisers in the UK.

“You can choose the journey you want your client to experience – that can then be a combination of digital or human engagement if you’ve got that portal at the centre holding documentation, communicating and being able to ask questions,” Johns said.

“It’s just an extension of your own CRM at the end of the day. Clients like to see what their position looks like visually. I think we’ve started to go there at a very basic level here.”

Meanwhile, after many years of travelling to South Africa to train its advisers, Martin Morris, a director of Sydney-based My Financial Mentors, is developing a customer-centric product called Engagement Hub.

“It’s become apparent to me that the gaps in South Africa and Australia are identical,” he said.

“All the tech that’s been developed over the past 10 years has been led by compliance and regulation. Through all of this, one person has been forgotten – the customer.”

Morris had been examining advice tech abroad but said often the most interesting products are outside of the advice industry. For example, he’s looked at the software human resource companies are using to understand people and behavioural aspects.

“Nothing is as simple as software that hasn’t been designed for financial advisers,” he said.

So, will some of the successful overseas providers come to Australia?

“They need to have deep pockets and some patience because our market is shrinking versus the UK, US and even South Africa. They need to understand what the market looks like versus their overseas market,” Johns said.

That said, she believes advisers must do their homework and clearly define their business model and the client experience they want to create. They must be able to ask the right questions of providers. And, if their data isn’t clean, it doesn’t matter how great a product is, it’s not going to fly, Johns said.

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