Over 70 per cent of financial advice businesses predict growth over the next three years, results of the inaugural Advice Efficiency Survey, conducted by Iress, revealed.
The survey, which spanned 113 Australian advice practices, found that compliance and legislative requirements are viewed as the biggest impediment to growth by two-thirds of advisers.
Almost one in three revealed they are struggling to find good people to employ, while well over half (57 per cent) admitted to feeling frustrated with manually entering client data into two or three different platforms.
Moreover, Iress found a direct link between efficiency and profitability, with research showing that the most profitable advice firms spent just 5.9 hours on a simple statement of advice (SOA), compared with the industry average of 8.5. Complex SOAs were similarly contrasted – 12.1 hours for profitable firms compared with the average of 15.
“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,” said Iress chief executive Andrew Walsh.
“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. These newer practices are also focused on training their people to get the most out of technology.”
In fact, according to Iress, most advice businesses believe that their operating models need to change, with just 6 per cent noting they will be operating in the same way in three years’ time.
“Australian advice practices are going through an unprecedented period of change driven by regulation, demographics, markets and competitors, and technology can be an important ally to help practice owners adapt and thrive, now and in the future,” Mr Walsh noted.
