This article was produced in partnership with Netwealth
90 per cent of advice practices are not effectively integrating their technology systems, the latest Netwealth AdviceTech report has found, alongside an emerging best practice blueprint for rolling out out digital technology.
The research was unveiled at the Netwealth Accelerate Summit in Melbourne on Thursday, which heard Australian advice firms have, on average, 15 pieces of technology.
“It’s challenging for an Australian small business to navigate what parts of technology actually matter to a business,” Netwealth senior distribution manager and summit MC Genevieve Frost said.
Frost added the challenge for advice firms is effective integration of different technology components.
“They’ve got double handling of data, they’ve got people who are jumping from one piece of technology to another within the business,” Frost said.
“It doesn’t create a happy or a seamless or an effective environment in-house. We know the ability to integrate this software for things like data insights, workflow triggers and eventually AI are pivotal to ensuring Australian practices are looking towards the future.”
With the proliferation of technology solutions in virtually every aspect of day-to-day life, there was little justification for advice practices to not follow suit.
“We also know that our clients – young and old – have technology at their fingertips, yet can you say your technology is pervasive to client engagement?” Frost says.
“We can see that less than 10 per cent of Australian practices can. One reason for this is digital transformation. Technology strategy is really challenging.”
The launch of the research comes as Netwealth CEO Matt Heine declared on Thursday morning in the opening address there is now a greater focus on innovation and technology-enabled growth had finally taken centre-stage.
According to the latest AdviceTech report, rolling out digital initiatives is incredibly challenging within financial advice businesses, with less than half of all firms indicating they can successfully implement new technology in their business.
‘Digital maturity’
“For most firms there are plenty of barriers – lack of time at the forefront of that,” Frost says. “We know that time is the most precious commodity and one that so many of us just don’t have.”
There is also a challenge with the “perspective of cost” and the opinion that technology might be too expensive to be worthwhile, and also dealing with insufficient resourcing or lack of skillsets within the business that can implement technology effectively.
As part of building the report, Netwealth teamed up with CoreData Research to interview over 350 advice practices to better identify best practice for rolling out digital technology.
“What we discovered was four major contributing factors to digital maturity,” Frost said.
Those four indicators are strong inhouse leaders that see the benefits of technology and can articulate the benefits to staff, a business culture that is flexible with empowered staff that are willing to experiment and take risks, having a change management process, and having a clear strategy in place.
Further to the four indicators of digital maturity was the identification of six key areas of success in digital implementation.
This includes the change management process, adequate resources allocated, and running pilots or prototypes to test the new technology systems. “This is the one we miss in financial advice a lot,” Frost said.
The other key areas are clearly articulating goals before a digital project begins, measuring success, and recognising and rewarding staff when a technology project is a success.
“Your digital strategy needs to be clearly defined and have true allocation of capital and resource, just don’t do it if you don’t have the money and resource to spend on it,” Frost said.
“Continually look at what your client needs and where the industry is going, including things like AI. Remember the critical importance of execution, it is only as successful as the end result.”
