The Technology Solutions Wooing Advisers

Technology is often spruiked as the key to practice efficiency, but over the past year advisers have largely put software investment on the backburner as they have focused on meeting their core requirements.

With compliance, regulatory change and the exam hanging over advisers’ heads, there was little time to shop around for the latest and greatest. Indeed, research for the Adviser Ratings 2022 Landscape Report shows a more restrained appetite for technology uptake and change. 

Amid this, newer providers are struggling to break the incumbents’ stronghold, despite their agility and broad approval from advisers. For example, Xplan still dominates in terms of market share when it comes to advice production, annual agreements, CRM usage and workflow management.

Figure 1 – Share of market, advice production (SOA)



Source: Adviser Ratings' 2022 Australian Financial Advice Landscape Report

Adviser picks: established and new software

Given the difficulty comparing the established, but often clunkier incumbents with the agile, but lesser-known new players, we divided Net Promoter Scores into two categories: those with market history or high penetration and the new providers. From the former category, Worksorted stood out, with good coverage, particularly among independent advisers. Given it’s still fairly new relative to the others in the category, its popularity among advisers is understandable. Generally, the more established providers are plagued by legacy issues.

Figure 2 – Net Promoter Score, incumbent/high-penetration software

Source: Adviser Ratings' 2022 Australian Financial Advice Landscape Report

New software providers don’t have the same problems and are often able to be more reactive to advisers’ needs. One worth mentioning is ProductRex, which received a strong first-year score and several honourable mentions for its client-centric approach.

Figure 3 – Net Promoter Score, new software

Source: Adviser Ratings' 2022 Australian Financial Advice Landscape Report

Despite their favour with advisers, newer technology providers often face an uphill battle creating both scale and profit in the crowded advice technology space. While we expect to see more appetite in 2022-23 for technology solutions across the board, we’re yet to see a major challenger for the incumbents’ market share.   

Where advisers may turn next

The 2021 Netwealth AdviceTech Report provided some clues about where practice investment may land in the next 24 months.

The platform provider’s surveys show there’s a continued and growing demand for solutions that can give clients greater oversight. More than a third of practices are looking to use client data reporting/dashboard tools and client portals in the next 24 months, while 2-in-5 practices are planning to invest in scaled advice solutions and online fact-finding or risk-profiling tools, Netwealth found. These technologies have generally shown an uptick already, partly due to the pandemic and increasing demand from clients to see where advisers are adding value. How this space will evolve is yet to be seen.

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