The scale of inefficiency in producing suitability reports is striking and poses a constant choke point for advisers, according to a new white paper.
The Transformative Power of AI: From Paperwork to People Work, commissioned by Advisory Ai, found nearly three quarters (71.9%) of firms spend between one and seven hours on a single report. Only 13.7% complete a report in under an hour.
The firm said that producing two suitability reports can take up an entire day, even before accounting for compliance checks, rework or missing data.
The whitepaper said: “Advisers told us this isn’t the occasional bottleneck: it’s the constant choke point that consumes their week.”
Even where firms have invested in technology, Advisory Ai said poor integration causes issues. One in three advisers said their systems are still not good enough, despite more than half acknowledging that integration is “very important.”
The report argues that artificial intelligence has the potential to significantly reduce the time it takes to produce suitability reports, reviews and onboard.
However, more than half of advisers said they don’t know enough about AI to use it effectively.
Research from Jigsaw Tree, included in the report, compared human processes against hybrid human and AI models. It found that the total time for annual reviews decreased by 59.8% overall, from 5 hours 47 minutes to just over 2 hours 19 minutes.
Time for writing and checking suitability letters decreased by 65.48% from 4 hours 45 minutes to just one hour 38 minutes.
“Cutting suitability reporting time by two-thirds doesn’t just release hours, it changes the economic equation of advice: clients who were marginal suddenly become profitable; advisers who were stuck in documentation loops suddenly have space for business development; firms that feared expanding their client base because of compliance workload find that capacity opens up,” the white paper reported.
Helise Chao, head of business architecture at Foster Denovo, said: “Report writing is our biggest win; 70% time saving on ‘pension withdrawal’ reports alone. What used to take hours is now prepared in minutes, leaving advisers to do the job they’re best at: giving advice.”
When asked what they would do if they halved the time it took to service existing clients, a third of advisers said they would redress their work/life balance, one third would reinvest this time to grow their business and one third would spend more time with existing clients.
The report concluded by saying paperwork is “not just an inconvenience, it is the bottleneck holding the industry back.”
It said AI can release this pressure, cutting documentation time by more than half and doubling adviser capacity.
“What firms do with that capacity is the real question. Some will reinvest in client experience. Some will reclaim time for strategic focus or balance. And some will choose to scale, serving twice as many clients with the same team, whilst simultaneously strengthening compliance, and tripling firm value in the process,” the report added.
Main image: LIlsk-UFVxk-unsplash
