Technology can make consolidation work better.
Advice firms that expand through mergers and acquisitions need to use technology better to increase profits, Wealth Wizards says.
The advice sector has seen a flurry of consolidation recently by big firms and providers. In March Aviva bought Succession Wealth for £385m as it boosts its presence in the IFA market and today Wren Sterling announced the acquisition of Manchester-based advice firm Mutual Financial Management taking their total AUM to £5.4bn.
The rapid growth in consolidation space is increasing the size and scale of firms at the mid to top end of the financial advice market.
Wealth Wizards business development director Nick Hall said firms can target the mass affluent market in the UK by deploying automated guidance tools.
These assess and recommend ways to improve the client’s financial situation and wellbeing.
Hall said: “Consumer-led, human-assisted technology is changing the way the financial advice market operates and is enabling ambitious, acquiring firms to scale their businesses by making their advisers more profitable while improving the client experience.”
The consolidation process is not hassle-free. According to Wealth Wizards firms typically inherit three significant operational hurdles along the way.
They include advice delivered through largely manual operations, inconsistent advice processes across businesses, and clients on the books who do not fall within their target market (orphan assets).
These create inefficient and expensive ways of working, which hamper or prevent the firm’s ability to scale up and be more profitable.
Hall added: “The traditional model of financial advice, by its one-to-one nature, is not scalable. There are two ways to resolve this using technology. First is to reduce the amount of time spent on each case to enable advisers to serve more clients by taking out the time-consuming processes involved in the advice journey.
“For example, automating the manual and time-consuming elements of the client journey, such as fact find creation, onboarding, and suitability report writing, can significantly reduce the time taken to deliver end-to-end advice.
“This can both speed up the advice process for the client and the business and make it more cost effective, as it allows advisers to focus on where they add most value, which is building client relationships and bringing in new business.”
Wealth Wizards has a growing customer base including wealth management, pension providers and large insurers in the UK.
It offers consumer-led and human-assisted financial guidance and advice via its Turo and MyEva platforms.
To learn more about how self-guided and human-assisted financial advice technology can help optimise your consolidation strategy please email firstname.lastname@example.org
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