A “swivel-chair approach” to technology is stifling adviser productivity and stunting firms’ ability to grow, Timeline CEO Abraham Okusanya has warned.
At the Personal Finance Society’s Rewired conference today (12 November), Okusanya said that in the five years following RDR, adviser productivity grew by over 50%.
However, in the last five, he said research showed it has declined by 10%.
Part of the problem, he believes, originates from “the way our technology stack is set up”.
“Twenty-five years ago, a gentleman from Australia had an idea to bring a piece of technology to the UK that would liberate the financial adviser.
“What has happened over the subsequent years is that we have numerous technology tools built around this ecosystem.
“As a result, we have ended up with a swivel-chair approach to technology.”
“Stop and think how many tools you now have to log into just to deliver advice to your clients,” Okusanya told delegates.
He said the next generation of platform – platform 3.0 – “is going to be an integrated ecosystem of all the main tools an adviser needs”.
He added that this new generation of platform, where everything can be done in a single place, “isn’t a prison, it’s actually easier to leave”.
This is because “you can click a button, download all your information and off you go”. He added: “Try doing that today, you can’t.”
This next generation of technology, he said, will “change the way we deliver advice”.
Okusanya also said advisers aren’t seeing as many clients as they could due to “admin overload” caused by increased regulatory pressure.
Financial advisers currently only serve 8% of the country, despite over 30% of households having a net worth of more than £500,000.
“Someone said to me ‘you’ve got to remember, Abraham, that the average financial adviser is 53 and running down the clock’. I can’t get my head around that.
“But it gets worse, because when I speak to younger advisers who are running their own businesses there doesn’t seem to be a huge amount of desire for growth.”
He said there “seems to be this perception that if you want to grow then you are going to destroy your lifestyle in the process”.
“I just cannot get it, because if there is demand for what we do, if we have capacity to do good in the world – to make a difference and make a little bit more money while preserving our lifestyle – why would you not do it?”
“If you are on the south side of 53, you have an incredible opportunity to make a difference because you have the best gift of all, which is time.
“If you are on the north side of that, you have something that the other side doesn’t – wisdom.”
Okusanya said the average adviser creates £160,000 of revenue per year for their firm.
Consolidation “doesn’t seem to make this significantly better”, he claimed, because “even when you are really big, the improvement is only around £5,000 per annum”.
He said there are “outliers out there doing significantly better than this” and referenced a wealth-management firm whose advisers are turning over £1m a year.
He said just spending 10% less time in the back office can translate into over half a million more in revenue.
“That’s how a small improvement in how you spend your time in your operation translates to bigger, better productivity and profitability.”
