Home / Focus / Advice tech shakeout predicted for 2022

Advice tech shakeout predicted for 2022

Shrinking adviser base to force consolidation
Focus

The last two years have been a near-perfect storm of activity for many financial advisers. The onset of the pandemic placed significant pressure on advisers to respond to client queries at a time of immense stress; many advisers were trying to deal with a flood of new clients as industry numbers dwindled and the big banks walked away from the sector.

It is likely that many financial advisers are thinking the same thing after the last two years of simply hanging on: it’s time to find efficiencies. Naturally, we are all looking towards the technology sector and how we can cut the many regulatory-driven bottlenecks within our businesses.

Anyone who has been considering integrating new technology into their business would be well aware of the plethora of options available. Whereas most industries have a reasonably straightforward and simple “tech stack” where each component communicates with each other, most planning businesses have a stack that ranges anywhere from 10 to 30 individual systems, very few of which are seamlessly integrated.

  • There is no shortage of fintechs seeking to disrupt the incumbent in IRESS, yet few seem to understand the huge complexity involved in running practices and advising clients. In fact, in recent years many platforms have come to market with seemingly great products only to disappear completely a few years later.

    One of the companies trying to help advisory practices gain these efficiencies is Finura Group, founded by Peter Worn, who was previously at Enzumo. With an arm’s length position outside of the day-to-day vagaries of financial planning, Finura is well-placed to understand the environment.

    After predicting the potential merger between Netwealth and Praemium in 2021, the group has outlined another round of advice industry predictions for 2022. Not surprisingly, it expects digital advice to heat-up once again, but this time, driven by asset managers and super funds who are seeking to engage directly with their clients. Any adviser has likely seen the growth in this trend of managers communicating and marketing directly with clients in recent years.

    Finura expects Microsoft to expand its footprint in the sector with a range of productivity tools, noting Google’s partnership with Hub 24, and Amazon’s with IRESS, as a new competitive landscape.

    Most importantly, it suggests consolidation or attrition is likely in the massive fintech space, ultimately driven by the shrinking size of the Australian financial planning market. An addressable market of just 13,000 advisers simply isn’t big enough to sustain this many meetings, according to Worn. 

    He highlights the merger between ROAR Software and Wealth O2, and suggests further activity will involve Advice Intelligence, Plutosoft and Work Sorted. While also suggesting, “there are too many of them,” when referring to the many Fact Find Platforms.

    Drew Meredith

    Drew is publisher of the Inside Network's mastheads and a principal adviser at Wattle Partners.




    Print Article

    Related
    MAX Award winners and the new world outside

    Half-way through the MAX and Investment Leadership awards for 2022, the audience was silenced by researcher and co-organiser Alex Dunnin. He said: ‘Life has caught up with us.” His forecasts were chillin

    Greg Bright | 13th Jun 2022 | More
    Portfolios require repositioning post earnings season: Sage

    With media news and headlines dominated by the deepening crisis in Ukraine, this year’s interim earnings season was dealt an additional driver. All in all, though, it was a relatively good reporting season, with companies cashed-up and the majority recording a profit, with about 67 per cent of companies lifting profits. According to specialist equities…

    Ishan Dan | 24th Mar 2022 | More
    Non-ESG funds continue to dominate flows

    Calastone’s latest Global Fund Flow Index, which tracks more than 500,000 buy and sell orders every month across platforms and managed funds, recently highlighted the challenge facing ESG-focused strategies. Despite seeing record inflows into ESG-focused funds in 2021, quadrupling the levels of 2021 to $3.0 billion, the data highlights that this remains only a small…

    Staff Writer | 11th Mar 2022 | More
    Popular
  • Popular posts: