AdviceBridge’s recent survey into where firms go to research new technology and how these are evaluated revealed a shocking result with 23% of respondents indicating that their firm doesn’t undertake any type of research at all.
The COVID-19 crisis brought forward years of change with companies having accelerated their digitisation, along with advances in solutions by an impressive seven years or so. Firms have seen the benefits it can bring – and this is just the tip of the iceberg of where it’s going.
Embracing new innovations and adopting the right technology will not only help clients but also make the roles of administrators, paraplanners and advisers much easier and more enjoyable which makes the findings more puzzling.
Given the speed and momentum of change over the past couple of years, firms taking this approach will surely disappear as the majority who are adopting newer and more efficient technology will be too far ahead before they realise.
The surveys main focus was to ask “Where do you go to research new technology/solutions or to keep abreast of what’s happening in WealthTech?” AdviceBridge asked firms to share information about the technology they use in their business and what sources they used in reviewing technology news and WealthTech innovations.
- 31% rely on their current tech provider to keep up to date with new technology news
- 30% use internet searches
- 23% don’t do any research on tech solutions
- 16% use trade media
A relatively high proportion of advice firms rely on their current tech provider to keep them up to date with what’s happening in WealthTech news. While this may be an easy option, it’s a questionable decision when you consider that their current provider may not be able to discuss different propositions or new technology opportunities that they themselves aren’t offering.
The Financial Technology Research Centre was the most popular site for tech news. Meanwhile, NextWealth, Defaqto, and JigsawTree were also in the running. Research also revealed that some firms used “non-IFA” market technology or outsourced providers to help with research.
This snapshot of how advice firms approach technology seems, at face value, to indicate a lower level of priority is spent on keeping abreast of technology development or a lack of engagement with looking into it by nearly a quarter of the market.
Seeing the heightened focus on new technology solutions being a real enabler to a business and the significant step forward it can provide, one would think that everybody would want to understand this area better (even if they didn’t go onto do anything about it). So, maybe it’s more of a catch-22 situation or the chicken and egg conundrum.
If there isn’t any key central place that stands out to research or get technology information, combined with less awareness of providers that can change a company’s prospects, could this be the disconnect and hence there not being the demand for such a service?
Equally, having spoken to a number of providers, one clear issue lies with there being so many different approaches to the same process by advice firms. This effects technology development as providers who are keen to develop better solutions become thwarted by the myriad of styles and approaches.
Taking client onboarding for example, one firm may want 10 questions, another 15 and another 20. Even for the same question they may want it asked or captured in a different way eg freeform, dropdown etc. Multiply this up by the hundreds of questions, processes and steps undertaken just for one firm and then multiply this out by the thousands of firms in the market and you soon see it’s an impossible task.
Any business is keen not to spend time and money where it’s not required and this creates an environment for providers where it’s safer not to bother. If the sector wants better integration, for example, then a more flexible approach to engagement and adoption needs to be taken.
How do you assess, evaluate, and review technology solutions?
● 54% of firms assess by trial
● 31% read reviews (review site data to be captured and shared in next survey)
● 31% assess through talking to peers and current users
● 15% rely solely on information provided by the product provider
The main combination, 23%, was with those undertaking both trial and assessment through talking to peers and current users. Worryingly that leaves a significantly high percentage only using one source or method to review and assess new solutions.
Unlike insurance comparison tools, of which there are multiple, and the investment and pensions ratings guide from Defaqto, there doesn’t yet appear to be any kind of comparison tool for technology.
Faced with the above question, one respondent said: “We ask the provider to present, which few seem bothered to want to do, preferring us to trial for a month, which is an utter waste of time”.
It is both surprising and disappointing that this was their experience, as trialling without support or structure seems entirely pointless – for both parties.