Advisers Dissatisfied With Technology Incumbents

Financial advisers are demanding more from administration platforms, planning software and investment research vendors to help them deal with a tsunami of disruption to the industry caused by regulatory change and growing customer expectations. This sentiment, reflected through adviser satisfaction, saw major incumbent providers rated poorly. Conversely, accolades were showered on agile players responding to needed product and service enhancements.

Adviser Ratings Managing Director Angus Woods said the findings from the recently released 2018 Financial Advice Landscape Report indicate that technology and investment research providers to financial advisers are on notice to better serve their clients. “Our survey clearly shows a high level of dissatisfaction with many technology players, at a time when advisers are facing other cost pressures, particularly in the areas of education and compliance. Advisers are looking for more technological and phone support from platforms and planning software to free up their time and provide compliant end-to-end solutions to achieve this. In addition, with increased adviser mobility between licensees and the growth in social media, advisers are becoming more influenced by their peers’opinionwhen selecting a new platform or software solution.”

We’ll look at investment and insurance platforms next week, but in this article, we take a look at financial planning software providers and research houses, to see how advisers rate them. AdviserNETgain and Lonsec were the providers of choice for theplanning software and investment research categories.

In assessing satisfaction levels of advisers, Adviser Ratings used a widely-known customer experience metric, the Net Promoter Score (NPS). NPS is a well-known metric that measures the loyalty of a user to a particular provider’s product or service. Other qualitative questions were overlaid-including fees, provider support, adviser reporting, platform functionality, robustness of research and ease of use to help understand the reasoning behind these scores. “With most providers where functionality or features were fairly even, we found the level of service and knowledge and helpfulness of its staff, was the most important feature when coming up with their score,” said Woods.

Financial Planning Software Providers

Despite (or perhaps because) they only service 2% of the market (St. George and Securitor advisers), AdviserNETgain was the only planning software provider to record a positive NPS (+18). In second place servicing 6% of the market was Adviser Logic with an NPS of -17. The two biggest players servicing the majority of the market also had negative scores. X-plan (owned by IRESS), with 53% of the market scored -28, while COIN (owned by Temenos), with a 20% market share had the lowest NPS of -43. It must be noted that Temenos, as the new owner of COIN, have bold ambitions to overhaul its current offering.

Clearly, this indicates there is a lot of work to do for the incumbent providers to raise their satisfaction levels with advisers – and indeed, it exposes the opportunity for newer providers to potentially replace these products with better offerings. Intelliflo and Advice Intelligence have signalled they are ready to aggressively tackle the Australian market.

The satisfaction levels vary across licensee and by region.

COIN (Temenos)

AMP advisers, who predominantly use COIN give it an NPS score of -45 with Financial Wisdom advisers rating it a lowly -73. BT advisers, however, are a little more satisfied giving it a +19. 

X-Plan (IRESS)

The main player in this space also with a high dissatisfaction level among the top 100 licensees. Fortnum (-92), Magnitude (-47), Count (-42), Charter (-34) represent a highly dissatisfied adviser base. On a slightly more positive note, there is some wind in the IRESS sails, with higher satisfaction levels by Bridges (0), Financial Services Partners (0) and Morgans (+20). 

Table 1 Rankings by Net Promoter Score for financial planning software providers

Regional analysis suggests some huge opportunities for incoming players - there is general dissatisfaction of all players in the two major metro areas of Sydney and Melbourne. Pockets of more satisfied advisers can be found in Adelaide and one or two regional areas, such as Ipswich and Coffs Harbour.

In further analysis, the disparity in satisfaction levels is largely due to accessibility of modules, training and on the ground support. As the market fragments, it will require a different level of service offering for the incumbents. Adviser segmentation and understanding who are the influencers within the individual practices in Australia (of which there are 8,667) is going to play a huge role for both new and existing players as adviser mobility accelerates.

Research Providers

The NPS scores of the research houses were typically more positive than the scores for software providers. The penetration rates of research houses that advisers use reflects the fact that many advisers have access to more than one provider. Morningstar dominates this area with 62% of advisers saying they use Morningstar research. Morningstar had the second best NPS of +8, sitting marginally behind the market leader Lonsec (+10). Lonsec penetration with advisers is the second largest of the research houses, but only half that of Morningstar, at 33% of the total market. Super Ratings and Mercer, who both service less than 10% of the market had the worst satisfaction scores of -18 and -13 respectively. The other sizable player in the research market is Chant West, used by 27% of advisers who gave it a marginally positive score of +2.

Table 2 Rankings by Net Promoter Score for research houses

With Adviser Ratings forecasting a significant acceleration of adviser movements and a continued shift into self-licensing, it opens the door to new players. “With satisfaction and loyalty rates at such low levels and with advisers moving to practices where technology providers don’t have a strong influencing relationship, incoming players can present a real challenge to the market leaders” said Woods. “Frustrated advisers will soon have more choice. It is up to the incumbents to see if they are ready for the challenge.”

If interested in the full 690 page report (Australia + 59 regions + licensee breakdown) for all suppliers to the advice market, please contact Mark on mark@adviserratings.com.au - Plenty of infographics, graphs, recommendations and opportunities for new and existing wealth participants. Advisers can get access to a free copy of their region (valued at $300) by filling out the 10 minute survey - here

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