Financial advice businesses are bullish about future growth prospects despite ongoing challenges as a result of compliance requirements, legislative change and a shortage of the right people, a survey has found.
A statement from technology company Iress says that in its inaugural Advice Efficiency Survey more than seven out of 10 businesses surveyed (72 percent) forecast growth over the next three years.
It adds that advice businesses are nearly unanimous that their operating models need to change, with just six percent believing they will be operating in the same way in three years’ time.
The technology company commissioned practice development consultancy Business Health to conduct the research with 113 Australian advice practices in September this year.
The research also highlights the characteristics of the most profitable financial advice businesses (see graph below).
Iress says almost two-thirds of those surveyed (60 percent) say compliance and legislative requirements will be the greatest impediment to growth alongside finding good people and advisers (32 percent).
The research also found that many advice practices want to focus on creating more scale in their business in order to achieve growth, however 57 percent are frustrated with manually entering client data into two or three different technology platforms.
Iress CEO, Andrew Walsh, says the survey results clearly show that advice businesses are optimistic about the future.
…Despite a narrow focus on registered adviser numbers as the sole measure of the health of the industry, advice businesses remain confident of future growth…
“Despite a narrow focus on registered adviser numbers as the sole measure of the health of the industry, advice businesses remain confident of future growth and are seeking to change their practices to scale.”
He adds that the research found that successful advice firms are achieving scale by optimising their processes and harnessing technology to unlock potential and work smarter. This is enabling them to provide advice faster, which equals more opportunity to generate revenue.
“Newer advice practices are also reaping the benefits of their technology investment, including higher adoption of tools like portals to engage with clients at scale and producing advice documents more quickly.”
Walsh says these newer practices are also focused on training their people to get the most out of technology.
Click here for a full copy of the survey results.
Characteristics of high performing Advice Practices
Other key highlights from the research include the characteristics of high performing Australian advice practices.