Booming UK advice market leaving Aussies in the dust
Technology has been instrumental in the significant growth of financial advice in the UK over the last decade and a major UK player is eager to transform the local advice market.
There were many similarities between the British and Australian financial advice markets. Both were heavily regulated and both had experienced successive interventions over the last 10 years.
Speaking to Money Management after officially announcing the launch of its services in Australia, intelliflo CEO, Nick Eatock, said there was one major difference between the two markets.
Following the initial panic and exodus of UK advisers following the Retail Distribution Review (RDR), often considered the UK’s FOFA moment, the industry grew significantly.
“We saw the advice marketplace increase in size year after year, which it has done since around 2012 and 2013,” Eatock said.
Figures released by the UK regulator Financial Conduct Authority (FCA) show adviser numbers have increased from 32,690 in 2013 to 36,674 in 2021, an increase of 3,984 advisers.
In 2013, total revenue generated by the UK advice sector was £2.6 billion ($4.7 billion), £1.5 billion of which was commission-based. By 2021, total revenue had more than doubled to £5.4 billion, with only £700 million earned from commissions.
“When RDR happened, there was a significant reduction in adviser numbers,” Eatock said. “There were major concerns at that point in time about whether it would be the death of advice.
“But what actually happened is advisers started concentrating on the things they do best and specifically using technology. We saw that very much as an inflection point, where technology became not just something that advisers had to have to keep the business running, but something that was a difference-maker in terms of how they provided advice.”
It had been a very different story in Australia, where financial adviser numbers had fallen from a peak of almost 28,000 in 2019 to less than 17,000 in 2022.
However, Eatock hoped technology would change the domestic landscape with the intelliflo platform already supporting more than 30,000 advisers globally.
Australia marked its latest expansion overseas after developing a dominant footprint in the UK with a market-leading share of 46% according to the latest report by Platforum and a successful launch in the US.
“This is the beginning of a much better place for financial advisers,” Eatock said.
Stefan Dooney, a Brisbane-based financial adviser with Tardis Advice, was an early adopter of the software.
“intelliflo has gone to extraordinary lengths to understand our business and identify how their software can improve our processes, reduce complexity and help us engage our clients in a simple manner,” he said.
“We feel we have a strong technology partner who we are invested in it. It is a refreshing change.”
AUTHOR
James Mitchell
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