Thegrowing reliance of planners on financial planning software, back-office technology and technology driven investment platforms could leave advisers facing damaging legal claims from their clients.
That is the warning from Tom Collins, of The Tom Collins Consultancy, who says the increasing dependence on technology by financial planners revealed in this year’sMoney ManagementTechnology Report, could leave planners open to being sued should the technology ever fail.
Collins questions whether planners will seek recourse from technology and software providers if sued by clients.
He says the reason for this concern is that planners have become accustomed to using the technology, but in most cases have little or no idea of the underlying formulae and systems which drive the technology.
Despite the growth of software, Collins questions, who, if anyone, was ensuring that software and technology systems were compliant.
He says that at the moment, industry standards for the provision of technology and software in financial services is lacking and that each player in the market has built their own system, further increasing the complexity and confusion among offerings.
According to the report, there are still some 15 platform providers and 15 financial planning software providers operating in a market where only about 40 groups have more than 50 financial planners associated with them.
