Advice tech built on 'scary' foundations

Advice businesses need to ensure the wealth management fintechs they partner with have the "technology chops" to match their understanding of the financial services industry, according to PractiFI.

Speaking to Adviser Innovation, PractiFI chief executive Glenn Elliott said that users of financial service technologies, such as advice businesses and superannuation funds, are more focused on a vendors ability to "speak their industry language" than the underlying technology.

"If you're the trustee of an industry fund or the CEO of an advice business, it's critically important that your technology vendor understands your industry and speaks your language. That's necessary, but it's not sufficient," he said.

"What's been missed is the need to ensure those vendors have technology chops, that they're hardcore technologists."

Mr Elliott said "far too often" technology businesses enter the market with a deep understanding of the financial services industry but poor technology.

"When you look under the hood of these tools, there's a bit of chewing gum and there's some string and sticky tape, and they're just not built on solid foundations, and that's kind of scary," he said.

"What you tend to find with a lot of vendors is that they have an idea and they say 'right, let's hire some developers and write some code and we'll stop when we're at a million lines of code and we'll see what we've got'. It doesn't make for a very substantive and mature technology stack."