The future of advice tech: Five key trends for 2025

Nick Eatock, CEO, intelliflo

The start of the year is a traditional time for looking forward and thinking about what to expect from the year ahead. In recognition of that tradition, here are five key trends I think we’ll see in advice technology in 2025 and beyond.

1. Stemming the offboarding tide

Eighteen months on from its implementation, Consumer Duty is now really starting to bed in. For better or worse, it’s affecting how advice firms think about themselves and the technology they need to support their business in the future.

One unintended consequence of the need to demonstrate fair value under the Duty is that firms are gaining a better understanding of the cost of delivering their services. More advisers are offboarding clients to whom they believe they can’t offer value for money, particularly those slightly lower down the wealth ladder who are harder to service effectively and also profitably. Recent research from NextWealth found that 72% of firms have increased the number of offboarded clients in the last 12 months.

Looking at our data, we’re seeing a similar trend – a reasonable number of advice firms have reduced their pool of clients in the wake of Consumer Duty. This isn’t good for UK consumers, and it’s not a position many advice firms are comfortable with either. As a result, I expect that in 2025 firms will look at how technology and processes can help deliver an effective ongoing service to slightly wider target segments, at a cost that provides fair value but is also commercially viable.

We’ll see a greater focus on technology for client-facing activity that enhances the client’s involvement with the advice process. For example, we know that many firms are looking at their ongoing review process, given the FCA’s spotlight on this area. Although the current review is just affecting the biggest advice businesses, we hear from advisers of all sizes worried that the regulator will come knocking at their door. Over the next 12 months, we should see technology being deployed that makes reviews easier to conduct, supports consistency across the firm, and increases transparency for both clients and the FCA, to ensure they are completed on time for every client.

By using technology to enhance and streamline advice processes, firms can effectively service broader client segments without compromising the quality of service provided to other target clients. This should alleviate some of the concerns around meeting Consumer Duty requirements and, hopefully, enable advisers to support a wider range of clients than they had thought possible, reversing – or at least slowing – the current offboarding trend.

2. Implementing AI safely and effectively

Although it’s not the only tech trend in town, I believe AI will be a significant part of the overall adviser tech landscape over the next few years. We know that many advisers are worried about not having the right skills to leverage AI – our 2024 Advice Efficiency Survey found that 95% of firms feel they lack the expertise in-house to implement AI effectively. I suspect that part of this is that AI has been billed as the great promise of our times – not just in our space, but across most areas of our lives. It seems overwhelming and difficult for firms to know where to start to make the most of it.

Although it’s easy to use available systems like ChatGPT and Co-pilot to ask questions and get an answer, effective use within a regulated professional like financial advice is more challenging. It ultimately relies either on vendors creating a practical tool that uses AI for specific tasks or organisations training their own models for their needs. For most small- to medium-sized advice firms, the cost and time involved mean the latter isn’t an option, so the vast majority of our sector will be looking to vendors for solutions.

In today’s marketplace, a few, relatively small, vendors provide AI-type services to advice firms, many of which focus on similar areas such as note-taking and meeting transcription. This overlap makes it difficult to decide which provider to choose. I expect that in 2025, the list of use cases will grow, and we’ll see a range of different areas where AI can be helpful.

At the end of the day, maybe there is no single ‘best’ choice. When deciding who to work with, it’s important to carry out proper due diligence to ensure that the solution solves your problem, is robust and secure, and integrates well with your tech stack. At intelliflo, our strategy is to support all applications that are useful to advice firms. We’re excited to help you obtain great value from AI and harness it throughout the advice journey, so expect to see further activity from us in this area. Check out our AI partners who have integrated with intelliflo office.

3. Unlocking the value of your data

Despite the hubbub about AI, it’s nothing without data. And better understanding of your data can provide real value to your firm, regardless of whether you use AI or not.

For example, if we look at financial advice in the US, while far from perfect, firms there excel at understanding exactly where their clients’ money is and how it moves, down to the last cent, thanks to deep data insights. This level of detail has been missing in the UK, where data from investment platforms and practice management systems hasn’t been as comprehensive and available to advisers as it should be.

However, access to data is improving, making 2025 the perfect year to take a closer look at the data you hold – where it sits, its different formats and how it’s being used. Developing a deeper understanding of your data will give you a clearer picture of your clients and your business, helping you make more informed decisions. While you might not have the budget for a Chief Technology Officer, most firms have a tech-savvy colleague who would be eager to dive into your data and uncover ways to leverage it more effectively.

We’re actively working to improve access to data across the whole advice journey with our integrated open architecture investment platform, wealthlink. By enabling you to deliver and manage the entire financial planning process, from initial onboarding to investment selection and portfolio management, without leaving the intelliflo office environment, wealthlink improves the accessibility, consistency and reliability of your data. With higher quality management information and greater confidence in your data, you will gain more valuable insights into your business and make better decisions for both your firm and your clients.

4. Building closer client relationships

We’ve all heard the rhetoric that AI is going to take our jobs. I don’t believe that it will ever entirely replace humans – people won’t suddenly have nothing to do – but it’s definitely going to change how we work in the advice sector. Firms will need to start defining new roles to adapt to this change.

These roles will focus much more on building deeper and closer relationships with clients. The advice sector has long prided itself on the strength of client relationships but increasingly faces the challenge of achieving this against a backdrop of enormous amounts of red tape, compliance procedures, and manual processes.

AI technology has the potential to simplify some of these complexities, for instance enabling advisers to spend five hours a day in contact with clients instead of two. How amazing would that be? For paraplanners too, the remit is shifting towards personal financial planning, more akin to a private office-style relationship with clients, where there is a deep understanding of every client and their family.

I think this shift will also increase the importance of intergenerational wealth management, supporting wealth creation across the generations and encouraging younger people to engage with financial advice.

Better knowledge of your clients will lead to better outcomes for them and your business.

5. Supporting business growth

We know that many businesses are thinking about how to grow effectively while continuing to deliver consistent, high-quality service. Technology can help, and again, AI could be hugely beneficial in this area. I’m hopeful that we’ll see AI-based technology enabling firms to leverage the information they hold across their client base to attract new business while also providing proper levels of service and support at better margins.

I also think the targeted support proposal within the Advice Guidance Boundary Review will be beneficial to advice firms if it comes to fruition. While the immediate impact on traditional advisers might be limited, I believe that receiving more targeted guidance earlier will get more consumers on the right financial track at a younger age. This will put more people in a stronger financial position in their 30s, 40s and 50s, leading to greater numbers seeking detailed personalised advice and creating a robust pipeline for firms.

As we look ahead to 2025, technology will have a crucial role to play in the success of the advice sector. Firms have a significant opportunity to leverage technology to deliver a profitable, high-quality service to a broader range of client segments. This can help meet the regulator’s expectations while maintaining the personal connections that clients value.