This article was produced in partnership with Netwealth.
Digitally led interactions haven’t just revolutionised our pastimes and downtime, they also affect our day-to-day necessities, such as accessing banking or government services.
For financial advice practices, this means more than just online marketing engagement via websites and social media. It means integrating technology deeply into everything they do.
Netwealth CEO and managing director Matt Heine jokes that the only real innovation in the last 20 years in the space has been digital signatures.
But as he kicked off the Netwealth Accelerate Summit, he noted that innovation stems from adversity, which has been the driving force behind re-engineering many of the processes in the industry.
“The industry has been forced to change, and I think, whilst it’s been often painful, one of the benefits is the profession is far more corporatised, with resources to focus,” Heine said.
“The focus now is on business model innovation, technology and the client, not regulation and industry issues.”
Kickstarting the journey
The advice industry is yet to reflect how dependent people have become on technology in their everyday day lives. Netwealth’s 2024 AdviceTech Report found only 10 per cent of advice practices are integrating tech effectively.
“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,” Netwealth senior distribution manager Genevieve Frost said, presenting the report’s results to the summit.
The report found 59 per cent of advice firms had a lack of time to explore options to add new technology, while 47 per cent felt it was too expensive to do so.
But one of the practices getting it right is Expert Wealth, which has already invested heavily in tech and has earmarked more than $1 million of further spending over the next three years.
“It’s a ripe time for those sorts of smaller players and AFSLs to be able to nimbly act and take advantage of a lot of this new technology,” the firm’s director and financial adviser Paris Bisley said at the Netwealth Accelerate Summit.
Expanding on those thoughts after the event, Bisley said the adoption and use of technology in advice has gained serious momentum.
“It’s a big talking point everywhere in the world, but in the advice community it seems like a really exciting time,” Bisley said.
“Before, you could sit back and rely on the traditional way you’ve [given] advice. But now there’s a definite feel in the air that people are either going to be gaining advantages or being left behind a little bit.”
But given the latest Netwealth AdviceTech report found 90 per cent of practices are not effectively integrating their technology systems, Bisley said starting off with minor enhancements can help make the shift feel less overwhelming.
Examples of a minor tech change he pointed to included digital communication channels – particularly with staff working in different locations – and online video meeting services like Zoom.
“Clients prefer that now, it’s meeting clients where they’re at,” Bisley said.
“Even just those few things added massive efficiencies without having to have this hugely bespoke system.
“But with Netwealth – linking up and having live data from Netwealth – the biggest change we’re doing is proactive advice, so letting the data highlight new areas, new investment opportunities for clients.”
But while an ardent supporter of tech innovation, Bisley noted practices must be aware of the risk of using AI.
As an example, he noted the benefits of avoiding the free version of Chat GPT and using instead the paid version, which better silos sensitive and private data.
“The most common [risk] is ChatGPT and people using the free version and not realising they’re throwing potentially sensitive information into the large learning model data pool, which is a huge risk,” Bisley said.
“There’s always a difference between price and value. Client-sensitive data we value…as the highest priority. It’s keeping their information safe.”
The maturation of AI
The expansion of the internet and the digitisation of services has been one frontier of the new world of technology, but the proliferation of AI has created a new galaxy.
It’s clear AI in the advice sector is still maturing – the AdviceTech research found only 5 per cent of advice firms use AI widely, and a further 44 per cent that still only have limited use or are in the experimentation phase of AI.
An example of a business that has taken an effective approach to AI is The Wealth Network, whose co-founder Dean Holmes explained at the Summit, that the firm uses AI in different ways for three different streams: compliance, client services and sales.
Each stream needs to a different approach, particularly when it comes to how questions and tasks are distributed to the AI, Holmes said.
As a result of the Summit, First Financial principal James Wrigley said he’s learned it’s easier to implement AI and automation that he previously expected, noting there are functions available from current technology providers, such as Microsoft’s Copilot, that are easy to use.
“We don’t necessarily need to reinvent the wheel or go and find bits and pieces,” Wrigley said.
“A lot of the systems we already use have some of these capabilities built in, but we don’t realise and we’re not using them just yet.
“I left the event thinking maybe it’s a smaller step than I thought to implement some of these efficiencies within my own scope of practice.”
Wealth Maximiser wealth coach Karen Eley said her biggest takeaway from the Summit was how AI can help improve her business.
“To be able to create client portfolio summaries using the content from meeting transcripts, and making sales calls, and doing all sorts of things,” Eley said.
Wealth Maximiser differs from the common holistic advice business that dominate the market and is instead based around hybrid human/digital advice, with a monthly subscription.
“They’re kind of fairly new in the digital advice space – they use social media as well around that general advice and strategic advice,” Eley said.
“They’re using social media channels to market out to Australians. It would be great to see more licensed financial advisers in that space to quieten down the noise of some of the unregulated ones.”
Tech in the real world
Netwealth’s 2024 AdviceTech report segments practices into three cohorts: AdviceTech Stars (top performers when it comes revenue, profitability and tech adoption), Adopters (similar tech mindset to Stars but are less advanced commercially), and Conservatives (firms that are cautious in their approach and focus on established technologies).
Just under a quarter of firms (23 per cent) are Stars, while Adopters (40 per cent) and Conservatives (37 per cent) still dominate.
When it comes to tech adaption, Wrigley describes his practice as being somewhere between the highest performers and those that are lagging.
“I know there’s other businesses that are further ahead but certainly there’s a lot out there that are nowhere near as far ahead as what we are,” Wrigley said.
The report found Stars are more likely to have a higher level of revenue as compared to the other segments, with 81 per cent having more than $1 million in revenue, almost twice that of Adopters (41 per cent with revenue over $1 million) and Conservatives (30 per cent).
Revenue is growing at a rapid pace for Stars with a quarter posting 25 per cent higher year on year growth (versus 9 per cent for Adopters and 6 per cent for Conservatives).
From ‘what if’ to ‘what’s next’
Reflecting after the event, Netwealth CEO Matt Heine told Professional Planner that over the past few years there has been a significant shift towards embracing a wide range of technologies within the financial services sector.
“The enthusiasm that was in the room at summit is a testament to this growing momentum,” Heine said.
“Innovations in areas like big data, AI and digital client engagement are transformative. It’s an exciting time to be part of this industry and Netwealth will continue to implement these advancements to enhance advice efficiency and client experiences.”
Heine predicted that in the next 12 months the conversation will shift from “what if” to “what’s next” more case studies and success stories emerge showcasing how AI, big data and client portal technologies have been integrated in advice practices.
“The next 12 months will see advice firms look to grow by continuing to explore ‘what’s next’, focusing on innovation in leveraging technology,” Heine said.
“Key themes will look beyond the technology itself, to how firms can build a culture of experimentation, equipping teams with the knowledge to manage new technologies, and prioritising client-centricity in digital strategies.”
Netwealth’s Frost said this ties into the theme of next year’s Accelerate Summit which will focus on best practices, lessons learned, and the new opportunities emerging.
“The discussions will continue to highlight the intersection of advice and innovation, and how technology advancements continue to improve business efficiency and create more personalised and impactful client experiences,” Frost said.
The Netwealth Accelerate Summit showed that technology has already embedded itself in the advice process, and while advisers will remain the brain and the heart of the industry, technology is the central nervous system facilitating the efficient coordination and processing of information.
Registration is open for next year’s Netwealth Accelerate Summit which will be held on 4 September 2025 at Centrepiece in Melbourne.
