Tech laggard advice firms at risk

New data from the FPA has revealed that half of advisers think practices using old technology are at risk of going under in the COVID-induced recession.

Tech laggard advice firms at risk

Lachlan Maddock

Last Updated: 20 November 2020 Published: 19 November 2020

An FPA/CoreData survey of how COVID-19 had impacted advisers found that 50.7 per cent thought that businesses using outdated technology would not survive the pandemic and the ongoing industry upheaval.

“Financial planners are keenly aware of the importance of technology and the benefits it can bring to their businesses,” said FPA CEO Dante De Gori.

“The volume of regulatory change that is coming through means that it is becoming virtually impossible to do business as a financial planner using old systems and old ways of operating. There are clear signs that digital advice is gaining momentum due to the rising cost of providing advice and changing consumer behaviour.”

Mr De Gori said that the FPA was continuing to lobby the government to work with advisers to improve take up of electronic disclosure, consent and transactions, including through standardised processes and forms.

The same survey found that while 88 per cent of advisers believe COVID-19 has demonstrated their value, around two-thirds think it will widen the advice gap – and while many advisers have been “inundated” with inquiries, the cost of advice remains too high.

“Our members have told us that delivering financial advice profitably remains the single biggest risk facing the performance of their business this year. Their greatest concerns continue to be the growing burden of administration and compliance and the rising cost of doing business,” Mr De Gori said.

“Streamlining regulation is essential, so too is effective use of technology, if we are to have a sustainable profession and give greater access to advice for more Australians."