“We think this will drive advice firms to spend more time defining propositions that align to the specific needs of different client segments. In most cases this is innately being done already, but it will create an impetus to ensure that firms are better engaging clients and demonstrating how value is delivered.”
Regulation the biggest area of concern
The Alpha FMC survey, taken in the final quarter of 2022, also found regulation to be the foremost concern among advisers.
“Although regulation is obviously well intentioned, it often creates challenges for firms to action and evidence,” says Northrop. “Often it’s the interpretation and understanding of the regulation, which creates the challenges, rather than the regulation itself.
“We see this in how firms approach fact-finding and suitability assessments. Typically this manifests in having to identify, capture and document a significant amount of data from multiple sources, and then playing every single piece of that back to clients, often in 80-plus page suitability reports.”
Technology slowing advisers down
Besides suitability reports, technology is also presenting an issue, with three in 10 advisers (31 per cent) saying it slows them down. Additionally, a third (34 per cent) said their technology stack did not enhance or hinder their business, identifying its impact as neutral.
“If it’s slowing you down, then ditch it,” suggests Progeny chief technology officer Tim Thompson-Rye. “While there are barriers to tech adoption, it is within every firm’s power to vote with their feet if a solution is not working for them, as well as make changes for the better.”
While Thompson-Rye says he has not personally experienced tech slowing them down when compared to a non-tech solution at least, he adds: “Inefficiency within tech solutions is rife, driven primarily by outdated solutions and business models and a lack of integration between systems.
“There are also some fantastic solutions out there that have transformative powers. They just need to be sought out.
“We need to stop tolerating inefficient solutions so that the market is forced to catch up with what firms really need. The fact that we are still talking about digital signatures as the biggest impact area is evidence of this.
“The right technology has the power to truly revolutionise a business and transform our clients’ experience for the better, but the barriers to both entry and adoption are often unfortunately too high for many firms at present.”
Chloe Cheung is a senior features writer at FTAdviser
