Why efficiency is key in a changing adviser landscape

According to Intelliflo, newly released insights highlight the importance of advice practices adopting technology and becoming more efficient, especially as the market changes. Our own data shows efficiency can also unlock higher revenue and assets under advice, while helping advisers build richer relationships with clients.

As the financial advice market continues to evolve, finding efficiencies can help practices boost their revenue and funds under advice, while enabling advisers to engage with a larger group of clients.

It’s a view we’ve held for a long time, and it’s now been echoed by the findings of this year’s Adviser Ratings Landscape Report, which shows how the Australian market has changed, and how practices must adapt to keep up with their peers.

The number of advice practices in Australia has dropped 8% since 2021, to 6,105. However, this consolidation is essential to diffusing regulatory costs and helping businesses to become more efficient in how they operate. As with any modern business revolution, technology is the key ingredient, enhancing everything from outsourcing to cashflow management.

The typical Australian adviser is now managing more clients than they had previously, because so many of their industry counterparts have left the industry over the past few years. The average number of clients per adviser is up to 97, compared to 91 in 2022. Again, embracing technology is helping advisers to effectively serve more clients. In the future, this will become even more important because client demand is expected to accelerate, as more Baby Boomers move into retirement and look for advice.

The data says practices will need to become more efficient in the future to manage their growing client base, and we couldn’t agree more. We do this by looking at our customer usage of our technology, and we also track more than four billion clicks on our system each year to create our annual eAdviser index.

Our latest eAdviser Index shows that advice firms that integrate technology into their process significantly outperform their peers on several metrics. We can clearly see the difference in businesses between the top and bottom groups of our clients based on engagement with technology.

Our eAdviser data shows our ‘Champions’ – the top technology adopters – were able to generate 54% more revenue per adviser and 76% more ongoing revenue than our lowest adopters (Explorers). Meanwhile, Champions’ assets under advice were 64% higher than Explorers, while their client load was 39% higher.

We have consistently made the case for practice efficiency and technology adoption as a gateway to overall business performance. The eAdviser Index enables us to assess the performance gap between technology adopters and those who are still testing the waters.

Given the correlation between technology and performance, our goal is to support every practice that uses intelliflo office to become an eAdviser Index Champion. We believe selecting the right tools can improve engagement with clients, by allowing them to see critical insights about how their wealth is tracking. Client portals, for instance, allow advisers and clients to connect in new ways, with clients given real-time access to how their adviser is looking after their money. It offers peace of mind for many, particularly in today’s volatile environment.

In other words, the benefits of technology adoption extend to both practices and to clients: they allow practices to become more efficient in how they manage an ever-increasing client load, while giving clients a richer experience and building more confidence in their relationship with their adviser.

Technology continues to transform entire industries and sectors. Financial advice is no different. Using the right technology to drive all parts of an advice practice, advisers can see more clients, have deeper relationships, and build their business faster. In a rapidly changing world, it is those that embrace tech that will run the longest race.