Advice technologies seeing adoption boom

New data has highlighted several technologies that are experiencing high year-on-year growth and adoption by financial advice firms.

Netwealth’s 2022 AdviceTech Report identified niche technologies and those growing in popularity by AdviceTech Stars and firms overall. It explained that AdviceTech Stars lead the way in both technology adoption and business performance.

“They’ve found the sweet spot of using the right AdviceTech in the right way, to address clearly identified issues and to generate tangible business and client benefits,” it said.

According to the report, AdviceTech Stars use a greater number of technologies than the average firm and spend more as a percentage of revenue of technology around 9.7% compared to 8.0% of overall firms.

Critically, the report explained these firms dedicate appropriate capital, resources and planning to technology with over half 57.8% having a clear map of the technology road ahead.

Netwealth joint managing director Matt Heine said explained the technologies listed as “ones to watch out for.”

The report said 30.4% of firms have adopted client portal technology.

Survey and client feedback tool usage has grown sharply with an increase of 57.8% from 46.7%, and a further one in five 20.0% intends on adopting it in the coming two years meaning it has the potential to become another popular tech.

Website content management platform has been adopted by two in five firms 40.6%. Usage has increased strongly among the AdviceTech Stars 68.9% from 48.9% and a further 24.4% intend on adopting technology to manage content on websites and blogs, meaning it has high growth potential.

Online fact-find and risk profiling tool usage has increased over the previous two years to 38.9% from 34.2% in 2020. The report said it’s even more widely adopted by AdviceTech Stars 60.0%.

“Advisers are moving away from Astute Wheel, 15.3% from 24.2%, and are spread across a large variety of providers,” it added.

Presentation software usage has remained consistent in most advice firms at 43.9%, but has increased among the AdviceTech Stars at 68.9% from 48.9% meaning this is a technology that has the potential for increased adoption more widely.

Social media content management platforms have also not yet been adopted by many firms, sitting around 19.5%, but usage of the technology to efficiently manage social media posts across multiple social media platforms has grown to 40.0% from 24.4%.

Scaled advice tool usage has grown among AdviceTech Stars to 37.8% from 31.1% and a further one in three or 35.6% plan to implement it in the coming two years.

Further, two in five advice firms, 38.0%, flag scaled advice tools as a tech that will have the greatest impact on advice firms in the next five years, indicating this is a technology with the potential for high adoption.

Business reporting and dashboard tools have been adopted by almost one-third of firms 30.4%. A high proportion of AdviceTech Stars 44.4% intend on implementing this in the coming two years meaning it is likely overall usage of this technology will increase.

The report found that client data reporting and dashboard tools have not yet been widely adopted sitting at 31.4%. However, it added 42.4% intend to implement its usage.

Data and system integration tools remained in the lower bracket with usage only equaling 17.8% of advice firms. The report said however 31.1% of AdviceTech Stars use them with another 46.7% intending on implementing them in the coming two years. Further, over a quarter of firms believe it’s a technology that will have the greatest impact on advice practices in the next five years.

The report concluded with off-platform asset management and said its usage to manage non-custodial investment has remained steady for most advice firms with a total of 26.7%. Uptake has increased with AdviceTech Stars to 51.2% from 34.1% meaning usage of this technology has the potential to grow.

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