A fifth of financial-advice firms plan to overhaul their tech ‘stack’ over the next year a NextWealth report has revealed.
Just 7% of firms this year have said they have in place or are referring clients to a digital advice offering with 13% saying they are developing or considering to develop one.
Additionally, one in seven firms have switched cashflow modelling tools in the last 12 months.
With Consumer Duty in mind, 46% of respondents are expanding the remit of their cash-flow modelling tools, to demonstrate the value of their advice.
Firms are also implementing tools to monitor client sentiment: 45% of respondents said that they are using client-satisfaction scores to evidence the value of advice.
The report also found that advice firms spend the largest share of their tech budget on their back office. On average, for every £1 spent on their client portal, advisers spend £5.20 on their back office.
Heather Hopkins, NextWealth managing director, said: “Consumer Duty and pressure on fees is prompting advice firms to ditch tech that they believe doesn’t work hard enough.
“This rationalisation comes after the number of tech partners recruited by advisers swelled during and immediately after the pandemic. Sadly, some tech providers can expect a ‘Dear John’ letter this year.”