Home / Technology helps advisors improve practice health

(Pictured: Iain Dunstan)

While the past few years have basically been a nightmare for financial planners due to regulatory uncertainty compounding the yield-producing challenge facing a big proportion of their client base, perhaps dawn has broken. The latest study by Business Health in association with Rubik Financial, has some interesting findings.

The study, involving a cross-section of 328 advisory firms, is the sixth in a series. It is based on a survey and reflects changes between December 2012 and December 2014. Overall, advisory practices are leaner and more profitable, generate more revenue and are making better use of their databases for technological assistance in their business.

Gross practice revenue, for instance, increased from $766,603 to $1.08 million in that time, as average principals and staff per practice rose from 4.6 to 5.9. Profitability at the practice level improved form 14.8 per cent to 17.0 per cent.

While they’re not making a fortune, they continue to shift their business model to fee-for-service, in accordance with the trend of whatever form of FoFA legislation ends up being in force. The proportion of practices generating at least half their revenue from fees rose from 43 per cent to 55 per cent in the period.

In the technology space, the report published last week, says that there has been “a more concentrated effort by practices to embed their major technology systems into their normal workflows”. The researchers say they suspect there has also been a more focused approach to complying with regulatory obligations through improved record keeping and files notes, as an example. The report, ‘Future Ready VI’, says:

>  95 per cent of practices use some form of database software to maintain client information (89 per cent previously).

>  84 per cent update information on their databases (70 per cent) within 24 hours of a client contact, 40 per cent on a weekly basis and the rest “when we get the time to do it”.

>  80 per cent have an integrated system for existing and prospective clients while the other 20 per cent have at least two client management systems.

>  90 per cent state they can easily retrieve meaningful client/marketing lists form their database.

>  69 per cent say they can set up and track workflows, such as making appointments, plan preparation, document signing and business lodgement. But only 28 per cent report that their workflow management system is fully integrated.

Iain Dunstan, Rubik chief executive, said: “Already, the technology that delivers online and scaled advice is providing more opportunities for advisors. This technology can help advisors reach the 80 per cent of Australians who are currently without financial advice and who represent a huge potential market for the industry…”