The pace of change in the tech powering advice businesses is accelerating. At NextWealth, we’ve been tracking the tech financial advice firms use through our Adviser Tech Stack reports. In our latest edition, we see some major developments that will shape the future of financial advice. While I can’t give away too much, I wanted to share a few of the key trends we’ve identified that are influencing tech adoption in advice firms today.

Appetite for change grows

One of the biggest shifts we’ve seen this year is a growing appetite for change. More financial advice firms are planning to shake up their tech stacks than ever before. In fact, nearly three-quarters of advisers made changes to their technology over the past year. That’s almost double the number from the year before.

With the exception of platforms, satisfaction scores for individual tech providers rose this year. Platforms have always enjoyed the strongest user reviews. Their scores declined this year but they remain on top. It seems that individual tools be getting better (back-office systems in particular), but the overall ecosystem of adviser technology – how these tools integrate and work together – is falling short of expectations. Only 26% say they are satisfied with their current tech stack.

Integration, Integration, Integration

It’s clear that integration between systems is still a significant pain point for advice firms. We hear time and again that re-keying is a major source of frustration. But the dream of integrations between disparate platforms, back-office systems, risk profiling tools, and more is just that – for now remains a dream.

Several of the advice firms we interviewed said they favour providers who can demonstrate an understanding of advice workflows and offer solutions that fit naturally into their businesses. Firms are actively looking to make changes to bring cohesion to their tech stack in a bid to drive efficiency and work with clients with smaller portfolio values.

AI adoption is here – and it’s growing fast

Part of the appetite for change comes down to enthusiasm around AI assisted tools. While in 2023, only 6% of advisers said they were using AI in their businesses, today, that number has jumped to one-third. Scepticism towards AI has dropped dramatically. Advisers are no longer just “interested but cautious” – they’re actively integrating AI-powered tools into their processes.

What’s driving this surge? Efficiency. AI is being used to streamline time-consuming tasks like meeting notes and some are experimenting with using it to write suitability reports. This frees up advisers to focus on the client-facing aspects of their business that add real value. Two weeks ago, I was lucky enough to attend the excellent Paraplanners Assembly. The paraplanners in the room said that AI generated meeting notes has been a game changer. They get notes in a consistent format from advisers, they get the soft stuff not just the hard facts. One said that AI drafting suitability reports means that she can focus on the really interesting cases for complex clients.

While many are still in the exploratory phase, the potential for AI to transform how advice is delivered is undeniable. Alasdair Walker and I recorded a podcast interview with Jonny Stubbs from LIFT. Look out for that episode next week for a useful case study. We also explored this in some depth at our recent AI Lab event (find out more and join for the January event).

What’s Next?

The pace of change in adviser tech is accelerating. Our latest Adviser Tech Stack report delves deep into these trends and offers a closer look at how individual tech providers are faring in this dynamic landscape. If you’re keen to stay ahead of the curve and better understand the advice tech landscape, get in touch.

For more insights, check out the full report – available now at NextWealth.