Revealed: the 4 key barriers to business growth for advice firms in 2023

A stick man kicks through the first of four doors in a row

By AdviceBridge

New and ongoing research presented at The Goodacre Wealth Management Forum 2022 shed light on key barriers that are preventing most advice firms from achieving their goals and how investment in IT systems can overcome these barriers. 

If you’re planning on making improvements to your service offering and front office productivity, read on to learn how investing in your online systems could help you to achieve your goals in 2023. 

There are multiple issues preventing advice firms from growing their business

The presentation revealed that the top five priorities for advice firms in 2023 were:

  1. Updating/changing legacy systems
  2. Client onboarding
  3. Better client digital services
  4. Client suitability
  5. Improve efficiency dealing with compliance/regulation.

Even if your firm has one or more of these goals in mind, there may be some barriers to meeting them. 

Below are four key barriers that tend to prevent progress. 

1. Legacy technology 

As your firm grows and you begin to require different systems for various different functions, your tech stack could become clunky, making it difficult to expand or improve upon. In particular, if your various systems aren’t well integrated, it can make the process of using each system very long-winded. 

You may have adopted tech that, at the time, improved how quickly a task or process was completed (over a purely manual process, for example). But since the market has moved on, these solutions aren’t as effective as more modern pieces of technology.  

When your systems are making it more time-consuming to complete your work, growing your business becomes extremely difficult. 

AdviceBridge integrates seamlessly with existing systems, making it easy to implement and relieving your team members of hours of additional admin work every month. In turn, this means that you can focus on delivering the service your clients need to a high standard and onboarding more clients than you were able to previously.  

2. Need for culture change

The Covid-19 pandemic was responsible for significant changes in the way many firms function. Being able to offer remote financial advice via video conferencing, for example, became a necessity extremely quickly. 

But has your firm continued to stay abreast of the cultural changes required to keep up with shifting client demands? 

As Professional Adviser reports, much of the technology that became a necessity during lockdown continues to be almost impossible to live without. So, firms who resist the tides that are steering many towards a more digital approach could find themselves lagging behind in terms of profitability. This threat is discussed in detail on this Money Marketing podcast.

Not only will firms be challenged by their peers, but they could also wake up to firms like Amazon or Apple assaulting their business. It’s worth contemplating what has happened before: Blockbuster versus Netflix for example, and the cautionary tales of firms like Kodak and Nokia.

The AdviceBridge team can help in educating and engaging those who may find the thought of change beyond them or not necessary. 

3. Lack of skill set within the company

In 2022, a Censuswide survey of more than 7,300 business decision makers found that just 24% considered themselves to be data literate. It also discovered that 78% would be willing to learn how to become more data literate. So, start by asking yourself: is it you that’s holding things back or your team?

Don’t let yourself or your team struggle and hold your business back. By investing in data literacy and educating your entire team, you can bring more diverse and creative thinking to your conversations about technology. This can aid problem solving and also help you to identify inefficiencies and opportunities.

Although 90% of business leaders cite data literacy as key to company success, only 25% of workers feel confident in their data skills.

If your business is struggling to capitalise on data, consider raising its profile among your employees.  Make it a conversation piece and empower employees to speak up, encouraging them to discuss it in relations to making improvements and generating new business ideas.

If this is something you are keen to understand better and help your employees to improve upon, AdviceBridge can help by implementing software that is intuitive and does not require a tech wizard to implement. Further, it can reduce the many touchpoints required to log in to different systems and the constant switching between them. 

4. Lack of understanding of the business benefits

As with every investment you make in your business, understanding the expected return on investment is crucial. 

So, rather than simply focusing on what the cost will be, it’s important to view the price of these technological improvements in terms of the value they will bring to your business. 

If you are investing in the correct system for your firm the return on IT spend can be significant, as illustrated in the chart below. 

Source: The Goodacre Wealth Management Forum 2022

Advice firms are already benefiting from upgraded technology

This is best shown in a case study of a UK Independent Wealth Management company with more than £5 billion assets under management (AUM). 

Their business goals were to: 

  • Improve advisers’ productivity and efficiency
  • Grow the client base 
  • Improve operating margins and profits
  • Grow the business at scale. 

After the firm had implemented a new online system to meet their needs, the business outcomes were overwhelmingly positive:  

  • Fewer support and admin staff were needed for each front office member of staff, reducing the ratio from 2.55 to 0.7
  • AUM grew by 110%
  • Net profits increased by 30%. 

Automation and artificial intelligence could be the future of your front office

IT systems play a key role in growing your advice firm and further investment will present more opportunities for business growth. 

When surveyed, front-office staff revealed some of their hopes for the future.

  • More than 50% want to be able to manage client preferences and risk in real time.
  • More than 50% want enhanced ESG functionality.
  • More than 40% want to be able to share more via their client portal, including being able to share documents and relevant educational materials.
  • More than 40% want more automation to reduce the time spent on admin. 
  • More than 30% want to be able to personalise portfolios using artificial intelligence.

These hopes can all be achieved with investment into the right pieces of technology for your firm. 

Get in touch

If you’d like to learn more about how AdviceBridge can help you to scale your business and achieve your goals in 2023 and beyond, please get in touch. Email or call us on 020 3925 3850. You can also book a demo of the software at a time to suit you.