New research finds compliance burden remains biggest challenge for advisers

Compliance and ongoing regulatory changes remain the greatest challenges for financial advisers in Australia, according to new research.

Investment Trends' latest 2022 Adviser Technology Needs report — which looked at the evolving technology needs for planners — revealed that compliance burden (65 per cent), the ability to provide affordable advice (41 per cent) and regulatory change (40 per cent) continue to be the biggest challenges for advice businesses.

The study reported that as advisers continue to use new solutions such as client relationship management systems (CRMs) and standalone modelling tools, they are demanding a better integration between the systems.

“Affordable advice is a key concern across the industry, with advisers looking to technology solutions to support their ongoing compliance and client engagement," Investment Trends research director Dougal Guild said.

"Greater integration can make a material difference and has also been proven to boost confidence levels."

Two-thirds of advisers who participated in the research firm's report said they would use an end-to-end solution to minimise delays and errors that they currently experience between advice delivery and implementation.

The research also found that as advisers and practices increase the adoption of technology in their businesses annual spend on technology has risen from an estimated average of $146,000 to $216,000.

“It’s encouraging to see advisers’ rising adoption of technology solutions. However, with this comes an increasing need for greater integration and standardised industry solutions to increase practice efficiency while minimising the time spent on compliance," Mr Guild added.

“It’s assuring to see advisers’ rising adoption in technology solutions and intentions to increase annual spend on these solutions going forward, making the advice preparation and implementation process more streamlined and effective."

The research follows a recent episode of the ifa Show podcast where financial adviser and co-founder of Plutosoft, Vincent Holland discussed the industry's growing interest in digital and recent debate about the role of robo-advice in the sector.

“I don't think digital tools are going to replace the adviser. I think that's often been talked about as a threat. I don't think that's going to happen,” he said.

“I think it's more, how can advisers use technology with their clients to make that advice process more seamless and to make sure that they're actually spending time on adding value for the client.”

Listen to the full podcast with Mr Holland here.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.