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Adviser ratings of platforms fall year-on-year

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14 hours ago

September 19, 2024

Adviser ratings of platforms fall year-on-year

Adviser ratings of platforms have fallen year-on-year while ratings for other types of advice tech have improved, a new report from NextWealth has revealed.

The report, based on feedback from hundreds of advice professionals, delivers in-depth analysis of the technology that underpins the delivery of financial advice.

This latest edition covers market share and adviser reviews of key tech providers, as well as the ways that advisers are using their tech and how that is changing.

It shows that back-office suppliers have improved the most.

Intelliflo office remains the market leader in terms of back-office solutions, but it is bottom of the list when it comes to user reviews.

Its scores improved in all the four criteria measured and it achieved its highest score for ‘integration with other tech’, a typical weak-point for advice tech providers.

Iress Xplan’s market share jumped to 20% and it received strong reviews from its users. Xplan and Enable tied for the top spot based on user reviews.

In terms of platforms, Fundment, Quilter, Transact and True Potential were each rated ‘excellent’, achieving an overall score of four or higher on a five-point scale.

Fundment was new to the ranks last year, and this year ranked second-only to True Potential.

Transact was the only platform to improve its scores year on year, achieving higher scores across all four criteria.

The report found that almost one in four advisers/planners made a change to their tech stack in the past year, a doubling on last year.

A third of financial-advice professionals works in a firm that plans to add a new technology partner in the next year.

This compares to only 8% last year. Only a quarter are satisfied with their current tech stack.

NextWealth managing director Heather Hopkins said: “The thing that really jumps out to me in this report is the unprecedented appetite for change.

“Our survey suggests that while most individual providers got better user review scores this year, the way that the entire stack knits together has become untenable for many firms.

“This is forcing a larger number to make a change. In fact, the appetite or change is higher now than in 2020 or 2021 when we were forced to find new ways of working.

“Two key themes emerged when we asked what’s driving the need for change.

“People are re-imagining the tech stack, looking for ways to improve efficiency and reach more clients.

“The cost to serve clients has gone up and many financial advisers/planners had to turn clients away last year.

“FCA figures show that financial advisers ceased servicing over 200,000 on-going clients in 2023.

“A revamped tech stack might allow firms to work more efficiently meaning that they can profitably serve clients with smaller portfolios.

“That’s great news but it will put pressure on incumbents who, while doing their bit of the chain very well, may get disrupted because of the way their system works with others.”

The report found the main barriers to change include a lack of solutions to the problem of integration and re-keying, as well as irrelevant use cases from some new entrants.

It also showed financial-advice professionals want incumbents to solve existing problems for them and are actively scanning for new players that offer solutions.

In addition, they are also turning to solutions that offer reduced business risk, fast-track for fact finds and suitability.

The report also showed that scepticism in AI has declined markedly.

One third of financial advice professionals say they are using AI in their business, up from 6% just a year ago.

Those that say they are ‘not using AI/not fit for purpose’ has dropped from 29% last year to just 7%.

Over half (52%) continue to be in the ‘interested but wait and see’ category.

NextWealth’s Adviser Reviews report is part of the Tech Stack series.

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