Beware of the shortfalls of technology
Technologyhas moved from the days of being an optional extra to being a core part of every planning business and dealer group.
But in a market that is becoming more crowded by the day, is there a future for any technology that has high costs but low usage?
The question is relevant after looking at the tables in the Technology Report in this edition. The tables show there are more than 35 players in the areas of platform providers, financial planning software and back-office services.
And while the number of packages available may appear suitable for an industry thought to have around 17,000 planners, it is worth remembering that many planners associated with larger dealer groups use their own proprietary systems, which are removed from the commercial sector.
This means that the universe of users is not as large as first thought and the pressure to get technology onto the desktops and into the back-offices of planners will continue unabated.
Given the costs involved, it is not unreasonable to expect that sometime in the future the number of technology providers will fall, driven out of business by inadequate systems or by failing to capture sufficient business or merging with other providers of technology to enhance both offerings.
But will this survival of the richest be a benefit bearing in mind that there are very few industry standards for the provision of financial services software and technology? There is also no impartial system of checks and balances to ensure technology delivers on the claims it makes.
Of course, any system that fails in these areas will be punished by planners ceasing to use it. But how long will it take for these things to become obvious and what damage will be done in the meantime?
Smaller providers will have to continue to prove their worth and all providers will need to ensure they are fully delivering on promises. This is not an option, especially considering the place technology now holds. The first technology provider to find themselves in court for failing its planner clients or having non-compliant systems will no doubt be telling that tale far and wide.
AUTHOR
Jason Spits
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