Back office systems have achieved an uplift in review scores from advisers, while platform scores have fallen, according to a new report from NextWealth.
According to its latest Adviser Reviews report, while platform technology scores best when considered at a category level, overall, adviser review scores of platforms dropped year-on-year. Back office providers, on the other hand, have seen a marked increase in satisfaction, although the category still sits at the bottom of the table compared to other technologies.
Intellifo Office remains the market leader but came last in terms of user review. In contrast, Iress Xplan’s market share jumped to 20% and it received strong reviews from its users. Both Xplan and Enable came top of the leaderboard for user reviews.
NextWealth said almost one in four advisers/ planners made a change to their tech stack in their past year, a doubling on last year. One in four made a change relating to data analytics, with data transposition and integrations continuing to be a major challenge for advice firms, particularly in the wake of the Consumer Duty.
A third of financial advice professionals work in a firm that plans to add a new technology partner in the next year, significantly higher than the 8% who said the same last year.
Meanwhile, adviser ratings of platforms dropped year-on-year. Fundment, Quilter, Transact and True Potential were each rated ‘excellent’ but Transact was the only platform to improve its scores year-on-year, achieving higher scores across all four criteria.
Heather Hopkins, managing director of NextWealth, said: “The thing that really jumps out to me in this report is the unprecedented appetite for change. Our survey suggests that while most individual providers got better user review scores this year, the way that the entire stack knits together has become untenable for many firms. This is forcing a larger number to make a change.”
Hopkins said two key themes emerged behind the drive for change; the need for greater efficiency and the desire to reach more clients.
Hopkins said: “The cost to serve clients has gone up and many financial advisers/planners had to turn clients away last year. A revamped tech stack might allow firms to work more efficiently meaning that they can profitably serve clients with smaller portfolios. That’s great news but it will put pressure on incumbents who, while doing their bit of the chain very well, may get disrupted because of the way their system works with others.”
The report also explored the main barriers to change, including a lack of solutions to the problem of integration and re-keying, as well as irrelevant use cases from some new entrants. Advisers want incumbents to solve existing problems for them and are actively seeking out new players that offer solutions, NextWealth said.
Advisers are looking for solutions that offer reduced business risk, the ability to fast track for fact finds and suitability and solutions that offer confidence in support services.
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