Disruption to the advice tech stack is happening at pace

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Globalisation is an emerging theme in the Australian advice and wealth management space.

Leading research firm Investment Trends has launched its 2020 Advice Technology Benchmark Report, which provides an in-depth review of developments in technology used by financial advisers to deliver advice, covering the impact of Best Interest Duty requirements, innovations in the client discovery process, delivery of scaled advice and new competition in the space.

The Report provides a detailed benchmark ranking of Australia’s advice tech providers across four main areas Strategic Advice, Financial Advice, Advice on Platform and Advice with Product. The research covering the features/functionality used to support the advice delivery process, spanning 32 sub-categories across 740 criteria.

This year’s Report reveals many of the leading Australian advice software and back- office applications are now owned by companies operating across international borders.

“The acquisition of AdviserLogic, Midwinter and Coin – the second, third and fourth most widely used planning applications, respectively – has brought a global perspective to the Australian market for planning application development,” said Ian Webster, Analyst at Investment Trends.

“Local advice tech developers are focused on lifting practice efficiency and anticipating future changes to advice delivery models, but over the horizon, there is emerging competition from integrated applications like Salesforce-based Wealth Connect and Intelliflo Intelligent Office from the UK, a trend that is set to grow.”

“Now more than ever, advice firms have access to an array of globally available, low-cost digital services to manage their client relationships and augment their advice production applications,” explained Webster.

Australian advice regulation enforces this global shift in approaches to financial advice services – placing the needs and objectives of the client at the centre of attention.

“ASIC is becoming more involved in providing explicit regulatory guidance on their expectations for meeting Best Interest and FASEA requirements. This has increasingly turned advisers away from a product selection/replacement mindset towards a more client-centric view, centred around client discovery, strategic goal-based advice and cashflow modelling,” said Webster.

“The Regulator’s expectations that the ‘client voice’ be explicitly present in advice documents has prompted advice tech providers to invest significantly in developing the client discovery process.”

“Notable improvements to the client discovery process ranges from dynamic and modular fact-find applications, to support for a discovery process that produces a strategy and scope paper that encapsulates the service that will be provided to the client,” added Webster.

In the first edition of the Advice Tech Benchmark Report, Investment Trends has assigned Awards for Excellence to commend providers that stood out. Iress emerged as the best planning application overall, with its comprehensive functionality, compliance technology and ability to support for advice firms of all sizes. The outstanding advice tech providers across six key categories are:

Award winners:

  • Best Planning Application Overall: Iress Xplan
  • Best Digital Advice Process: Morningstar AdviserLogic
  • Best Goals-based Advice Application: Advice Intelligence
  • Best Client Discovery Application: Astute Wheel
  • Best Business Management Application: Xeppo
  • Best new Advice Tech Application: Wealth Central, IOOF

About the report:

The Investment Trends 2020 Advice Technology Benchmark Report provides an in-depth review of recent developments in technology used by financial advisers to deliver advice, covering the impact of Best Interest Duty requirements, innovations in the client discovery process, delivery of scaled advice and new competition in the space.

The Report also provides a detailed benchmark ranking of the four major comprehensive advice software providers. The benchmark model covers the features/functionality used to support the advice delivery process, spanning 32 sub-categories across 740 criteria.

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