Majority of financial planners believe practices with outdated technology will not survive: report


Dante De Gori

The COVID-19 pandemic has increased demand for financial advice, but financial planning professionals are warning that the role of technology could make or break financial planning practices across Australia.

CoreData surveyed financial planners about the impact of COVID-19 on their businesses, which was presented at The Financial Planning Association’s (FPA) keynote event held in September.

The findings reveal that while 88% of financial planners believe COVID-19 has demonstrated their value, two thirds think it will widen the advice gap.

Dante De Gori CFP®, CEO of the FPA said that members have been inundated with inquiries since the COVID-19 pandemic began but the cost of providing advice remains a key challenge.

“Our members have told us that delivering financial advice profitably remains the single biggest risk facing the performance of their business this year. Their greatest concerns continue to be the growing burden of administration and compliance and the rising cost of doing business,” Mr De Gori said.

“Streamlining regulation is essential, so too is effective use of technology, if we are to have a sustainable profession and give greater access to advice for more Australians.

Technology critical to advice practices

Mr De Gori said technology is playing an increasingly important role in advice businesses as financial planning professionals look to digital solutions to drive efficiencies.

The CoreData survey found that half of financial planners surveyed (50.7%) believe advice businesses with outdated technology will not survive.

In its recently released 2020-2025 Policy Platform, the FPA argues that electronic disclosures and transactions provide more flexibility for consumers in how they engage with financial advice and the ability for financial planners to provide better services to their clients.

“The FPA has recommended the government works with the profession to improve the take up and effectiveness of electronic methods of disclosure, consent and transactions, including through standardised processes and forms and, where appropriate, by requiring the profession and financial services industry to provide electronic options,” Mr De Gori said.

“Financial planners are keenly aware of the importance of technology and the benefits it can bring to their businesses,” he said.

“The volume of regulatory change that is coming through means that it is becoming virtually impossible to do business as a financial planner using old systems and old ways of operating. There are clear signs that digital advice is gaining momentum due to the rising cost of providing advice and changing consumer behaviour.”

FPA delivering tech tools for members

Over the last three years, the FPA has created a number of reports, tools and guides to help members identify technology solutions to assist in making their financial planning process more efficient, cost-effective and engaging for their clients. Resources available for FPA members, include:

  • The FPA’s Future of the SOA interactive guide: Despite the technological advances to improve the end-user experience, the profession and broader industry is still predominantly paper-based. The FPA established a working group of financial planners, lawyers, research, consumer advocate and more to create a vision of what the future SOA could look and feel like. To understand the evolution of the SOA, how financial planning professionals can help their clients digest information from an SOA, and topics relating to digital SOA, explore the webpage here.
  • A Fintech Check list: A guide on the fintech environment, providing planners a toolkit to identify and integrate fintech solutions into their offer.
  • Financial Planning Process Mapping Tool: In partnership with YTML, the FPA has developed an online tool to help financial planners quantify what are the real costs involved in providing advice, determine how long it takes to provide advice and-to-end and calculate how to price your services accordingly.
  • Technology Assessment Template: This checklist can be used to guide the software selection process. It is a simple tool to maximise the likelihood of selecting both a partner and system to meet your needs.

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