Financial advice firms have made major strides in improving their use of technology over the last year leading to increased revenue and more clients, according to Intelliflo’s eAdviser Index 2020.
Intelliflo analysed 3.7 billion customer clicks to identify where a firm is on its tech adoption journey and how effectively it is realising the benefits of greater tech adoption. Each firm is given a score that indicates where they are on the scale of very low adoption to full adoption (where a firm is using tech effectively to a very high level). Firms are then segmented into four cohorts based on their eAdviser scores: Champions, Embraces, Adopters, and Explorers.
Between 2019 and 2020, the number of firms in the highest adoption group (Champions) increased by 57% and the number of firms in the lowest adoption group (Explorers) decreased by 70%, showing that tech adoption is on the rise across the industry.
The number of firms currently in each cohort compared to 2019:
| Types of firms | % change |
| Champion (highest adopters) | +57 |
| Embracer | +10 |
| Adopter | +0.5 |
| Explorer (lowest adopters) | -70 |
Intelliflo says that technology adoption is leading to greater business performance as firms in the top technology adoption group, Champions, generate on average 57% more revenue per adviser compared to the lowest adoption group, Explorers. Not only are the highest adopters generating more revenue, they are generating more ongoing revenue with Champions having double (112%) the recurring revenue of Explorers.
Smaller increases in adoption can have a noticeable effect too. Firms that move up to Embracers can generate up to 22% more revenue per adviser, and those that move up to Adopters can generate up to 18% more.
There is also a general correlation between more clients and higher eAdviser Index scores as Champions have 41% more clients than Explorers. The data also shows that Champions have 126% more assets under management (AUM) than Explorers.
Nick Eatock, CEO of Intelliflo, said: “This year’s eAdviser Index highlights that embracing technology can have a fundamental impact on any business. Firms that score highly are clearly outranking their peers in terms of clients advised, revenue generated, recurring revenue and assets under management. Interestingly, many of our Champions are small advisory firms which shows that anyone can maximise the use of tech, regardless of size. This means that technology can help level the playing field to some degree.
“We still find that some advisers adopt as little as a tenth of the technology they have at their fingertips. So, for us, it’s important that we don’t just provide the technology but that we help advisers make the most of it, leaving them with more time to focus on their clients and their business.”
Bob Kelly, drector of IT at Chase de Vere, an Intelliflo customer, added: “We’ve been accelerating our digital strategy since 2019, but this year we’ve seen a noticeable difference. Prior to the pandemic, we had 1,000 clients signed up to PFP and now we’ve surpassed 10,000 – all in just over seven months. We’ve adopted a genuinely customer-centric approach by offering secure messaging and convenient options such as DocuSign, and put digital at the heart of our operations.
“We’ve also trained our advisers on how to make best use of PFP with their clients, showing exactly what it can do for them, which has been a great success. Alongside this, the pandemic has dramatically changed people’s engagement with technology and accelerated the adoption of PFP. People are now fully embracing the digital era. The client feedback has been incredible, particularly on the real time access to their portfolio and secure messaging. For us, this marks the next evolution of our client servicing.”