Outdated and cumbersome advice software is preventing financial planners from delivering scalable advice in an efficient and profitable way, according to a new white paper, which states it should only take “minutes” to produce a limited statement of advice.
The release of the white paper, which was written by Provisio Technologies and titled ‘Financial Advice Optimisation: A Game Changer in Advice Efficiency’, coincided with new research from the Financial Planning Association which showed that 88 per cent of initial advice and 92 per cent of ongoing advice is still delivered face-to-face.
FPA chief executive Mark Rantall said there was definitely an opportunity for technology to play a bigger role in the delivery of advice.
Provisio Technologies chief executive Cameron O’Sullivan (pictured) said financial planning practices needed to embrace optimisation software and abandon old fashioned modelling tools which were designed for holistic advice and required advisers to input extensive client data.
As is often the case with modelling software, advisers put client information into the system unaware of what the final result will be. If the recommendation is “undesirable”, the adviser will need to “adjust the inputs before modelling the strategy once again”, O’Sullivan said.
“Due to the trial and error nature of modelling software the whole process can take several hours before an adviser has settled on the correct strategy,” he said.
However, optimisation turns the process around by having advisers input a desired outcome first with minimal client information, and revealing the steps required to achieve that goal.
This allows advisers to handle scaled advice queries in a timely and efficient manner, with a statement of advice able to be produced in minutes as opposed to hours under current methods.
“Advisers cannot profitably continue spending one to four hours producing an SoA using modelling software that was designed for comprehensive advice,” O’Sullivan said.
“They need a solution designed specifically to optimise advice queries where possible, which automates the repetitive modelling and analysis to produce finished SoAs in minutes.”
The white paper concluded that reducing the cost of delivering advice would be difficult, if not, impossible without technology-driven efficiencies.
