In the world of financial advice, there is much scope for efficiency if systems could integrate with each other. When you consider back office processes, new business processes, the annual review and fee reconciliations, if these systems could talk and share data with each other, the adviser would only need to input the data once, and not 3 times which is now the norm.
Some advisers have stated that up to 80% of their time is taken up by re-keying in data. Aside from the massive waste of an adviser's time this is, it's also a process which opens itself up to human error.
The issue of disconnected systems is clearly a pressing one, with advisers having to use five advice systems on average to give advice, build portfolios and manage clients. Typically, a client's details will have to be entered at least three times in a typical journey.
The Lang Cat found that 85% of firms agree that lack of integration is a major cause of business inefficiency.
We've also found that many firms we speak to agree that they could be much more efficient if systems were truly integrated, so what's stopping them?
Legacy systems: with the FCA notably frustrated by their own legacy systems, advisers are relying on a combination of creaky platforms and Excel spreadsheets. There's the mentality that if it's not broken, it doesn't need to be fixed, so updating technology is pushed to the bottom of the pile.
Plus, if financial advisers and their support teams are already spending 80% of their time re-keying data, they really aren't going to have the capacity to implement another system and take the time to learn or change current processes when they are already strapped for precious time.
·Another reason for the slow approach to digital adoption is that we have a tendency to treat data as a source of competitive advantage, this is especially true for the large providers and asset firms who make it incredibly difficult to move assets easily.
It's clear that there's a short-term pain for long-term gain mentality needed here; but the pros clearly outweigh the cons. Lang Cat thinks that a typical firm could be 100% more administratively efficient if systems were properly integrated.
The firms that decide to do this soon will no doubt gain a competitive edge, with the ability to process more clients and price themselves more favourably. Once a handful begin this process, the pressure will be on for others to follow suit as the market matures and embraces technology.
Integration is a key consideration that we're taking in the development of our financial advice engine Turo, creating an advice eco-system which makes use of APIs to avoid the duplication of data. We strongly believe that technology is designed to do the heavy lifting, not create more work.
Let's gaze even more into the future. Our use of APIs doesn't stop at the integration of CRMs or quote platforms. The Wealth Wizards and Turo vision is to create a 'driverless money manager' which integrates with a customer's many data touchpoints (subject to their consent) such as bank transactions and investments. The adviser won't be hung up on entering customer data into systems because it'll be there already. Plus, with the data easily available, more key parts of the advice process can be automated, giving the best possible recommendation for the client, overseen by a qualified adviser who has the luxury of time to serve their clients more fully.