Advisory firms and providers will need to “up their game” when it comes to technology, with younger advisers accelerating tech adoption within the advice industry, says NextWealth.
The firm’s Tech Stack Report found that advisers aged under 45 work in firms that invest more on technology. On average, these firms spend £23,077 a year, nearly £10,000 more than the average figure for advice firms.
Furthermore, more than a third (36%) of under-45s plan to add a new piece of technology, more than double the average of 15%. For advisers aged over 65, this figure fell to zero.
Heather Hopkins, managing director of NextWealth, said: “Our research highlights that the future of financial advice is firmly rooted to use of technology, with younger advisers driving adoption. Firms will need to invest in their tech infrastructure and be prepared to innovate if they want to attract younger advisers to their payroll. Providers will also need to up their game as the new wave of young, tech-savvy advisers comes through.”
Video conferencing solutions (33%) and hardware (31%) were found to be the most popular tech additions in the year to March, followed by client engagement tools (22%) and financial planning software including cash flow modelling solutions (19%). One in ten (10%) invested in back office systems.
Hopkins commented: “It’s safe to say that Covid led to a high degree of ‘distress purchasing’ – advisers had to move fast to enable remote working for employees and to engage with clients. Zoom and Microsoft Teams provided a lifeline to keeping business going. However, our research indicates that their popularity post-pandemic is less certain. By contrast, eSignatures were described as easier and better, suggesting advisers will prefer them post-pandemic.”
The pandemic also saw three quarters (75%) of advisers report an increase in clients using their client-facing technology, with over a third (36%) witnessing a significant increase.
Hopkins added: “We found client-adoption of tech is consistent across age bands, though slightly higher among clients of younger advisers. Whether this is because younger advisers are more confident using this type of tech is speculation but could be one explanation.”
