intelliflo’s 2024 advice efficiency survey
The inaugural intelliflo advice efficiency survey looks at how well modern advice processes are working. It highlights that overreliance on manual processes and a lack of integration and digitalisation are creating unnecessary errors and extra work for advice professionals.
Although most advisers believe AI will be beneficial for the profession, our survey uncovers a vast knowledge gap within firms around how to use it effectively.
To remain profitable, while continuing to deliver good outcomes for clients and meeting the growing regulatory burden, firms need to make sure their business processes are working as effectively as possible and that their technology is enhancing the advice journey, rather than obstructing it.
More than nine out of ten advice firms want to improve efficiency
According to our latest adviser research, 94% of firms believe their advice journey isn’t as efficient as they would like. Of the 112 firms we surveyed, just seven (6%) are entirely satisfied that all their processes, from initial client contact through to implementing the plan and ongoing management, are running as effectively as possible.
The survey found that the majority of advice firms would like to increase efficiency, with inefficient internal processes, resource constraints and lack of integration between technology solutions cited as the main barriers to operating more efficiently. Among the verbatim comments, advisers said that there is “a mismatch of various paper and software”, “too much typing”, “too many different systems” and “paraplanners are under resourced”.
Onboarding issues
The survey found that onboarding clients is a particular pain point. On average, firms spend around 15 hours onboarding new clients, with 60% of that time not spent directly with the client. Breaking this figure down, advisers spend 3.5 hours on fact finding and research, 5.3 hours on report writing, 2.7 hours on presenting and recommendations and 3.5 hours on implementing and financial plans. Extrapolating these figures across average new client numbers, a typical firm spends 70 days a year on tasks relating to report writing alone!
One of the main reasons given for onboarding taking up so much time is the need to rekey information into multiple systems. As well as creating inefficiencies, this is also a major cause of errors in the data collected. Firms say, on average, mistakes occur in 20% of client onboarding processes, however one in ten (11%) experience rekeying errors 50% of the time.
Accessible, accurate data is becoming increasingly important to the delivery of quality advice and good outcomes for clients. For regulatory purposes too, firms are expected to hold correct information on their clients, to facilitate FCA data requests and comply with data protection rules. Working with a significant quantity of errors creates unnecessary challenges for firms. It demonstrates the need for integrated systems that allow client information to be entered once as a ‘single source of truth’ and then used throughout the advice journey to cut user errors and improve overall efficiency.
Improving digitalisation
So how else can firms improve their processes and become more efficient? Our respondents agreed that greater digitalisation of processes would significantly enhance efficiency within the advice journey. On average, just 40% of workflows are currently fully digitalised, and respondents would like this figure to be closer to three-quarters (75%) in an ideal world. One in five (22%) would go much further and have no manual or paper-based processes at all.
Given the time currently spent writing reports, it will come as no surprise that 57% of firms would most like to see more digitalisation around notetaking and extracting key information from meetings to take some of the admin burden away from staff.
Embracing the AI opportunity
Alongside increased digitalisation, our survey found that the majority of firms think that artificial intelligence (AI) will help improve efficiency.
Nearly three-fifths (57%) of respondents agree that AI will be beneficial for the advice profession, with just 7% thinking it would have a negative impact. Firms believe it will have the greatest impact on client communications, data analysis and compliance.
Joseph Twigg, CEO of Aveni, which uses AI to automate many of the administration processes within advice firms, believes today’s technology heralds the start of a fundamental shift in the way people work. He says: “As a sector, we need to carefully integrate AI technology into the financial advice workflow, and if done properly, advisers will see two or three hours of low-value admin taking 10 or 15 minutes. AI will take on most of the burden of note-taking and report writing, with the adviser simply reviewing and accepting the content. The adviser does still have overall responsibility, AI is not replacing human involvement, but technology will get them 90% of the way through the process, rather than having to start at the beginning every time.”
He believes that integrated properly, AI will allow advisers to manage two, or even three, times as many clients as they do now, without compromising the quality of the advice they deliver.
Kit Ruparel, Chief Technology Officer at Recordsure, which analyses and assesses client conversations and documents using AI, agrees the technology has huge potential to improve efficiency within firms and support business growth. He explains: “The ability of AI to identify and date documents and conversations, break them down into summary themes and pull all relevant elements into a checklist can save firms significant time, especially during the file review process. With all the relevant information in one place, teams can review a much larger percentage of files in the same amount of time, helping firms to scale while also delivering consistent advice and evidencing regulatory compliance and good consumer outcomes.”
The AI knowledge gap
However, while three quarters (72%) of firms think it is important to integrate AI into advice processes and nearly half (46%) are using AI, or plan to start using it this year, only one in twenty (5%) feel they have sufficient knowledge and the skill set in house to capitalise on the opportunities it offers.
Kit argues that understanding what specific AI tools can and can’t do is crucial to implementing them effectively into advice systems. While AI can drive efficiencies within a firm’s processes, it’s important that the right tools are used for the right purposes.
He says: “There has been a lot of excitement around generative AI tools like ChatGPT being the solution to everything. The current cohort of generative AI solutions excel at creating new content, but in the advice profession, much of what’s required is examination and analysis of existing data. The regulated nature of advisers’ work means that often answers need to be factual and consistent, not creative.
“While generative AI’s ability to generate human language makes it useful for tasks like chat-based research and generating creative content, actions that involve finding and presenting information stored in your internal data sources reliably and authoritatively, will be best served by AI tools based on more robust machine learning solutions.”
Implementing technology effectively
Consumer Duty and the need to evidence compliance on an ongoing basis, has increased the admin burden on advice firms. Implementing effective processes that drive efficiencies throughout the advice journey is more important than ever for successful, compliant businesses that deliver the best possible outcomes for clients.
As our advice efficiency survey shows, firms are well aware of the need for fewer manual processes, less rekeying of data and greater use of digitalisation and AI to enhance their efficiency. The goal now is to embed the right technology throughout the advice journey, and ensuring everyone uses it to its full potential. Using technology, including digitalisation and AI, to maximum effect, holds the key to overcoming inefficiencies and delivering a high-quality, competitive service that meets the needs of clients, the regulator and advice firms.
intelliflo’s Q1 2024 advice efficiency survey collected responses from 112 financial advice firms (121 advisers).