Dec 6, 2024

Advisers should do their best to leverage technology to overcome the hurdles of onboarding 6 December 20248:00 am Technology has benefited the advice sector in many ways, from improving back-office systems to speeding up cashflow modelling and the annual review process. Over the past few years, artificial intelligence (AI) and other tech have played a huge part in both enhancing and streamlining the operations of advice firms. This has given advisers more time to sign up new clients and meet with existing ones. It’s perhaps unsurprising, then, that FE Fundinfo’s 2024 Financial Adviser Survey shows that 55% of advisers have increased their technology spending in the past year. The same research shows that 40% of them plan to increase their tech expenditure over the next 12 months, while 56% intend to maintain their current level of spending. Advisers have attributed the delay to the time it takes to gather information from providers and clients alike Overall, 57% of advisers who responded to FE Fundinfo’s survey said AI systems could improve the quality of service offered to their customers. Just under half (47%), meanwhile, believe it could enhance their client outcomes. This, of course, is laudable in a world soon to be dominated by humanoid robots (if Elon Musk has his way). FE Fundinfo head of UK distribution Stephen Ford says it’s clear advisers are “prioritising continuous innovation to modernise and optimise their operations”. ‘Great inefficiency’ However, for all the advances on the tech front, and for all the good it has done, there remains a huge problem. According to a recent study by research and consultancy firm NextWealth, it takes, on average, 33 days from sign-up to receive the first piece of advice. In this day and age, it seems incomprehensible that anyone should have to wait that long. Long delays do nothing to help advisers — or, most importantly, the clients they serve NextWealth says this timeframe suggests “great inefficiency”, and it highlights it as a feature of the advice process that needs attention. It adds that it first raised the issue in its Financial Advice Business Benchmarks Report 2019. Five years on, it has seen “no meaningful improvement in how long it takes to deliver initial advice to new clients”. Advisers have attributed the delay to the time it takes to gather information from providers and clients alike. And it seems the issue is more prevalent here than in other countries. Research from adviser software provider Avaloq has found that wealth management professionals in the UK deem tasks associated with client onboarding as more “onerous” than do their peers in Europe. For all the advances on the tech front, and for all the good it has done, there remains a huge problem Internal approval processes were highlighted as a pain point by 88% of UK respondents, versus 76% in Europe. Manual intervention, meanwhile, was flagged as an issue by 70% of UK advisers, compared to the European average of 62%. Avaloq says this disparity was also evident in the tasks deemed most time consuming, with 70% of UK respondents claiming that ‘Know your client’ checks took too long. This is significantly higher than the 63% of European respondents who said the same. Meanwhile, 55% of UK advisers said setting up client accounts was “too time consuming”, compared to 51% in Europe. When asked what would support them in their current role, 96% of UK wealth managers said simplifying or automating the onboarding process would offer a minor or major improvement. “The onboarding process leaves clients with a lasting impression of their new wealth manager, so it is vital that it runs smoothly,” says Avaloq managing director for the UK and Ireland Suman Rao. It seems the issue is more prevalent here than in other countries “Not only does this set the tone for a positive client relationship, but it also increases the chances that the client will stay and invest over the long term.” Advisers should do their best to leverage technology to overcome the hurdles of onboarding and focus on providing clients with an easier and quicker experience. This is vital to maintaining trust in the profession as it sets the tone for how the public perceive the world of financial advice. First impressions count, as they say. Long delays do nothing to help advisers — or, most importantly, the clients they serve. Momodou Musa Touray is senior reporter This article featured in the December 2024/January 2025 edition of Money Marketing. If you would like to subscribe to the monthly magazine, please click here .