Praemium Advice Leaders
Better Technology Decisions to Unlock Practice Growth
In the rapidly changing landscape of wealth management, technology is no longer just a tool — it's the engine driving future growth.
In this episode, Praemium's General Manager Matt van Dijk will be joined by Peter Worn, Managing Director of Technology and Digital Consultancy, Finura Group, for an engaging and interactive session on the critical market themes and prevailing challenges advisers face with existing tech solutions.
Topics include:
- Role of advice technology in driving future growth
- Challenges advisers face with existing technology
- Impact of AI solutions on your people and practice
- Strategic allocation of technology to drive profitability
- Cyber security resilience
- Key findings from Finura's technology health index
In the rapidly changing landscape of wealth management, technology is no longer just a tool — it's the engine driving future growth.
In this episode, Praemium's General Manager Matt van Dijk will be joined by Peter Worn, Managing Director of Technology and Digital Consultancy, Finura Group, for an engaging and interactive session on the critical market themes and prevailing challenges advisers face with existing tech solutions.
Topics include:
- Role of advice technology in driving future growth
- Challenges advisers face with existing technology
- Impact of AI solutions on your people and practice
- Strategic allocation of technology to drive profitability
- Cyber security resilience
- Key findings from Finura's technology health index
Hi and thanks for joining us for premiums podcast series. I'm Nat Van Dyke, general Manager for Queensland and the Northern Territory, and today I'm joined by Peter Warren. He's the Managing Director of FNURA Group, a leading technology and consulting firm. Fnura advises some of Australia and the UK's leading financial services companies on their strategy at execution. Peter, thanks for joining us, great to have you here today. Thanks, matt, good to be here.
Speaker 1:One of the and Peter and I were having a brief chat before we started today's broadcast. There's some really interesting things that are taking space around technology and how businesses are considering technology. And really the first question, peter, I wanted to run past you and riff on a little bit today was around satisfaction, because we've really seen that satisfaction is consistently being reported, both anecdotally and in many polls, as a problem for many, many people. And ever since PCs really became a feature in modern offices a generation ago, we've seen people saying, well, we're not happy with this, we're not happy with that. You've really worked with a lot of advice groups and you've been consulting on their technology health. What do you seem to find as being the root cause of this?
Speaker 2:Yeah, the data certainly suggests you're right. Satisfaction's never been lower with financial advice software. According to the latest investment trends survey, it's at an all-time low, 58% or lower, with the diabolical Platform's much higher though. Matt, I'm pleased to see that everyone seems to like their platform, just not their software, and maybe some of the answers to that are in that question. I think there's two aspects. I think the software industry for financial advisors is fairly small in Australia, so there hasn't been the same flight of capital into our sector for R&D and to make products better, because the addressable market is just not that big, pretty capital constrained and also in the low cases advisors don't spend a lot of money on software. So perhaps it's a chicken-me-egg problem. Platform's a totally different story, because there's a lot of really successful companies like Premium and others that have built great businesses on the back of that.
Speaker 1:I was going to say. It's a really interesting point, though, because platforms aren't paid for by the advice firm Usually, unless it's a software as a service product, which we do have but it's the end investor, which is that it can be paid for the platform through their administration fees, not the advice business. And for the numbers nerds on the podcast like me, we're talking at circa 15,600, I think, advisors now as of end of August 2023. If you're going to put the capital towards developing software, if that's the size of your addressable market, that's got to put a price on software, or how much you're going to be getting investing, that can generate some very scary numbers really, really quickly. When you're looking at what your role or your return on investment's got to be for the amount of capital that you're going to be putting in to not only create but then service, that's protected.
Speaker 2:Yes, not on. And and you know, if you look at other more successful software companies in the B2B space Zero is the one I go to quite a lot they made their software actually free for accountants and they charge the small business user, you know, and that's, and that would be a new strategy, because accounts are like financial bonds, they're spending a lot of money and no one's quite correct that In wealth management and maybe this is why, in actual back platforms are playing increasing role in technology for that reason. So that's sort of the economics. But I think back to the behavioral side and why people are less satisfied with software. I do like this idea of liquid expectations and it basically means that our Sensors of satisfaction are often governed by our most recent experiences of something in a parallel. So if I'm using Netflix or I'm using my iPhone or some of these amazing apps that you know we and like picking my children take completely for granted today but just work out of the box and a really intuitive, we kind of start expect that in our daily life with that, those software solutions we use. So so if you go from that and then you go into use one of the more Traditional financial planning solutions. You sort of go gee, your eyes looks a bit old, looks a bit tired, there's a lot of friction here, clunky, all those things, and go gee, why not better? So I think that's driving it.
Speaker 2:I think there's a it's it's the matter effort that has to go on customization and configuration. The software is really misunderstood. So I could talk to two users the same software solution and get two really different stories on their satisfaction levels. And what I tend to find is the user that's actually spent a lot of time on configuration, customization and training of the software solution is always happier. It's just by and large and we have this, you know, view or this idea that I should just work out of the box. Well, software built for consumers works out of the box. That's how it's got to work by design.
Speaker 2:Software for businesses has never worked that way. So in every other vertical, every other industry out there, the customer, the business, needs to spend time Configuring the solution to work for them, because as businesses we do things really all really differently, and financial planning in particular. We have literally found millions of ways of doing this process is across business business. You know this is the platform right. This is a challenge for platforms to think so.
Speaker 2:I think part of it's the software Not maybe reinvesting enough in the wine experience. I think part of it's the user as well, and we just haven't got that now. What I would say is that's changing a lot, as businesses are more Corporatizing, they're understanding they've got to spend money on software. But take it me wrong we come across just as many unhappy Sales force users which is widely regarded as the best CR in the world really unhappy sales force users as we do small little CR in sort of Very, very limited functionality. So it's just like everything in life, it's just it's what you put into it that you get out of it, and I think that's driving a lot of Satisfaction issues.
Speaker 1:So is it really, I guess, a combination of the the inherent complexity that comes in having a, I guess, an engine room grade level of technology and need to be able to manipulate different things as well as what we're getting very much used to in terms of how we run these large consumer scale apps, and just kind of that disconnect going? Why can't something run as well as what I'm running on my phone that my kids use, whereas I've got to use something that's just? You know, it's not sexy, it's not cool, it seems to add friction, not remove it.
Speaker 2:Yeah, and I think you know the economics are quite obvious in the sense that Facebook or Meta, who owns Instagram? It's a $400 billion market cap company. Iris, that runs most of the software for Australia, is now 1.2 billion billion dollar company as of this week. So just the sheer amount of capital they have to spend on UI and the cloud computing and the infrastructure and anyone that's in software knows how much infrastructure costs now for cloud computing it's so expensive to do anything Just knows that there's some issues there. So compromises have to be made. And don't forget I mean, if these software companies don't make profit, they won't provide these software solutions for our market. So I think this is why I do say to advice terms strap yourself in for more expensive software, because that's the only way things are going to get better.
Speaker 1:I remember when Apple hit a sort of 700 bill market cap a number of years ago and which was exchange rates. It was about a trillion oz At the time. You could literally buy the top 20 companies if you were to liquidate Apple down to dollar coins in the ASX. So that was. All you mind is to CSO, cso sorry, not CSRO Clockly banks, telcos everyone coming through their top 20 businesses at the big end of town, and it's just the scaleless is kind of missed there.
Speaker 1:Talking about businesses, though, like Meta particularly so, who run Instagram, whatsapp and Facebook that I can think of I can't remember their bought snapper, if that was someone else. There was a saying that came out with those businesses where a lot of people perceive them to be free, and it was that. It's that a reminder, that comment that there's no such thing as a free lunch and if you're not paying for a product, it means you are the product. What I was then reflecting on again was the rise of generative AI tools, your chat GPTs, to go with something that's so hot right now. I think there are, and I'm keen to get your thoughts for the audience on this. There are some real challenges around how much information is being fed. Privacy of information, how that's being used, and then how how privacy leads into cybersecurity, how, as a business, you might be making rules around what's used and what's not, but how are you ensuring that's being followed by your staff, and particularly for staff that might see it as almost becoming an ubiquitous part of their life?
Speaker 2:Yeah, totally, and we're literally learning daily as to what this all means. So you're right, the free component of chat GPT and there is a paid version which is just faster and different things. But the free version the reason it's free is everyone that uses is actually training the product to make it better. And of course, that will change in time because the sheer costs of running chat GPT, the cost per search, are enormous because the computing power that's got to go behind it. Look at the NVIDIA share price. That will tell you everything you need to know about why you know GPUs, particularly to run these models, are so valuable. So if we go back a step, why does it really matter? Well, obviously, if you're just at home trying to work out, you know writing. How do I write a funny Christmas card to my mother-in-law? That's fine for chat GPT, they'll do and they'll do lots of cool stuff.
Speaker 2:But the minute you start creeping your work life and to get your dealing with consumers, you've got to be more mindful. So we're quite big on and, as always, you can't see around. Wait for regulation. I mean crypto is only regulated a few months ago as a financial product. I mean, you know, literally trillions have been lost and we're only regulating that. Anyway, I think it started on that, but let's look at it. The short answer is the regulations are never going to tell you what to do, because they'll never be fast enough, so you've got to get on the front foot with your staff.
Speaker 2:So what? By and large, certainly for Nura. We don't believe in draconian ban it, Like I've seen a lot of big companies ban it. It's naive. People can use in their phone. You know, people always found ways to get around this stuff. The same thing happened with social media. Right back in the day you couldn't use social media at work, and that's just. It will work. So mobile has killed that.
Speaker 2:But I think from a work environment point of view, there are steps you can take as an enterprise just to lock that down. So, for example, Microsoft Bing has a search capability built into its model. There is a Bing enterprise version chat to BT, which, for example, for Nura users. So all of us use that version. It's a locked in environment where, effectively, we use that large language model, but we only use it on a large data and nothing goes outside of it. So that's a simple thing most businesses can turn on just to mitigate some of that risk. Now, you're never going to fully mitigate the risk that you know a billion paraphernalia is going to put something in his phone around. Fortunately, humans are going to do human things, but that is a reasonable thing I think a business can do to mitigate some of that. I'd encourage you to speak to your managed service IT provider to turn on that capability. They know exactly what you're talking about.
Speaker 1:I think there's. You know we're starting to sort of move into some areas around. What is the need of an advice practice manager or owner to understand how technology is being used to the business. This plays out the number of interesting ways, because we were and look for those of you that love to go and do it Peter and I have just done a webinar where we've touched on a lot of these concepts you can find on the premium website. But one of the concepts that came up was around what proper due diligence looks like and how that stopped people from activating their ideal outcome when they're taking on a new form of software.
Speaker 1:I was thinking at the time we were going through it, Peter, that I feel that a lot of advisors and advice business owners and managers don't actually know what proper DD fundamentally looks like. I actually remember presenting to a large group of advisors once and the concept of cybersecurity kept my presentation. An advisor said to me at the time look, I don't have time to think about cybersecurity, that's my licensees problem. So I remember siding the owner of the licensee, who was sitting a couple of desks away, and the expression on his face told a thousand words at that particular time. So, look, that's certainly an extreme example where someone's completely abdicating any responsibility for things blowing up digitally. But if people are thinking about, I get that proper due diligence is important. Where do I start? How do I start? What does my IT committee look like? Do I need an IT committee? Can you offer some suggestions to the audience around how they might want to consider solving that question, around what does proper DD really look like and how to start?
Speaker 2:I think I've said in the webinar, I can't stand committees generally, but I'm going to recommend at least a working group for the willing.
Speaker 2:I'd call it. So what I would say? If you've got people in your business that really enjoy this stuff, then it makes sense to utilize their talents and get them invested and credit, and certainly for their. We work. So quite often we'll sit as an advisor to the business, bringing that out of perspective. I'll consult the boards, I'll do different things or we'll run that process, but we're always insisting on an internal person being involved. But I think having some forum where IT issues or software issues can be brought to the table is important and importantly if the business is big enough, particularly where there's sort of representatives of different stakeholders of the business, where you can get people's requirements and feedback and all those kind of things in place. So actually it makes some better decisions moving forward.
Speaker 2:I find it quite incredible that so many software decisions are made by advisors and practice owners and if the poor support staff that inherit those decisions are not part of the process. I'm quite critical of software companies that don't spend any time at the back office staff in the sales process who, frankly, are the user and the most critical eye on these things. You want to know good software, what good software is? Go talk to power planners. They'll tell you exactly what's good and what's not. So I just think it's that human element of the decision-making process needs to be better, in the same way that some advisors are great advisors but they're not good at picking managed funds. You get an asset consultant for that. It's the same thing for me. So I just think that that's logical.
Speaker 2:What you can do, we have and your licensee or people often do have some resources you can use to give software vendors some due diligence questions to ask.
Speaker 2:Often we'll make those questions more around how many users they got satisfaction levels, support levels, just that kind of stuff their economic viabilities an important question to ask, just to go. You know, eyes wide open and recommendations and endorsements from people who are frankly not shareholders of the business or advisors that have invested in and think it's a good idea. So, but I just don't have any price at the end of the day. They're familiar, the right things, but I think even then upper level of bidders, you know, ask yourself that fundamental question what are we doing this again? What is this really going to address in our business? Is it going to solve the issue? We think it will and so often we just find the wrong thing, put in for the wrong reasons and combination of those factors. So there's not a single issue there, but I think it's a combination of yeah, standard tickets to the games, due diligence on the provider, but, more importantly, just spending time as the business is saying. What do we really try to solve here?
Speaker 1:and why. And I think as well, the other key point is going you know, maybe it's not depending on the size of the business and I understand that there's going to be resource limitations for every business yeah, definitely. So I was going hey, maybe it's not me that needs to solve this, maybe I've got staff that can do it, maybe I can partner with someone to do it. You know, think outside. So it's not going to be a problem because it's and I think so.
Speaker 1:Really, my last question on today's conversation before I move on to something that's hopefully a little bit more aspirational, long term, looking to a brighter future. When I'm thinking about risk and governance, we know cybersecurity is that key priority, but it's a bit like when you're thinking about investment, it's like risk and liquidity. By the time it's a problem, it's far too late to really do anything about it. So we'd be beginning to get your thoughts, peter, on what FNUR is observed as, what those key areas are that really need addressing in the cybersecurity space. So if anyone's going to be kind of going checklist do, I think I'm on the right track. What does that really look?
Speaker 2:like. So three key things. First one is training of staff. So I'm on three or four different boards. I've got to do cybersecurity training for all of them, which is quite frustrating because they're all different courses, but that's part of our governance model. Every employee, top to bottom director, whoever you are, does cyber training, learning what to do and what not to do. They do the companies I'm involved with. We do phishing tests, we do all sorts of tests to see our employees clicking on things that shouldn't be clicking. I think you've got to do that. That's probably the first thing, because most cyber incidents are generally caused by a human making a mistake, and usually employee.
Speaker 2:The second part of the equation is probably more operational and that is how do we share data with our clients, with our external partners, with our stakeholders? So there was a question, a really smart question in the webinar going why is an email secure? And a simple reason it's not about your email security, it's about your counterparty. So often you can't control what happens to something on the other side, but ultimately, with your data, you're on the hook if things go wrong. That's why you want to create secure environments where people can access information. So, with big fans of people using document sharing portals to share sensitive stuff. So you got the handle that. So that's sort of a processing.
Speaker 2:And the third one is definitely around password management protocols. We're still, you know, the net of businesses that are still trying to save money, save a few bucks here and there on licenses by sharing passwords. We know people do it. You know there's WhatsApp groups going around and people sharing explain logins and all sorts of stuff. It's got to stop. Part of being a profession is paying for the tools that we use to do our jobs and I'm happy to take the stand in the industry that I think you know. I think multi factor authentication should be mandated and all software financial advisors use. I mean, advisors are lucky. I haven't done this yet. I reckon they will in time because I just think it's just an obvious way Things going to go wrong from my perspective. So, yes, I think summarise that it would be definitely the training processes and document management and password management. They're the three really small way hanging free things you can do.
Speaker 1:That's brilliant. Thanks for that. I think to sort of move on to some positive changes that people or everything we talked about, I'd be positive changes, but a lot of advice firms that I'm speaking to are often sort of asking the question around what's the right number of technology platforms to use and where do they really start in creating a framework to evaluate that. So business going right? How do I, how do I right size my business from a technology perspective? How can I begin thinking about that?
Speaker 2:Yeah, and there's variables into that equation. So it will come down to the type of business you run. Are you a pure financial planning, wealth management business? Are you wholesale, are you retail? Are you multidisciplinary? Do you have accounting, lending, other services? So there's a whole bit of nuance there around those things which will go into that. And certainly one would argue that as the complexion of the business changes, it may change the software, it may change the CRM use, and those things will play a factor.
Speaker 2:I think, though we look at what are the core pillars, and the core pillars really for us are what is that central source of data, central source of truth that we use across their business to make decisions, to execute on client engagement? And that's the CRM component. There's the productivity side of our business how do we communicate internally, how do we share documents, how do we collaborate? And for most businesses it's Microsoft or Google, and 95% of them are Microsoft suites. And are we maximizing what we get for free or included in our Microsoft price out of that? And most businesses don't use the full power of their Microsoft suite. And then the final component is probably the more that client front-end piece which I think is the most under-invested and under-value.
Speaker 2:Part of it is the sense that post-COVID people really I think people sometimes really underestimate their clients, how digitally savvy they are. I mean, a year and a half ago, you couldn't go to a restaurant in Melbourne without knowing how to use an app and a QR code. You couldn't order food without QR code in a restaurant. In some cases still today, it didn't matter how old you were, the years and stuff. And I think retirees are more digitally savvy than ever before and, I think, will quite evenly embrace a more digital relationship with their advisor. They still want the personal relationship.
Speaker 2:Don't get me wrong, that data goes away, but there's so many things you can be doing via portals and things like that for the future and I think that's really where the game should be played in the future is all the back-office stuff, and our clients don't know whether you use X-Plan or what's the RMU. They don't care, nor should they, but they do care about how you share data with them, how you engage them, how you book appointments with them, how the video chat works. They're the things I'd be spending my time on and I reckon they're the really exciting things that are, frankly, the bar's pretty low. It's pretty easy to differentiate yourself on that stuff.
Speaker 1:We've seen a really interesting sort of this play out in quite an interesting way. Where you're right, it's the experience that someone's getting in a lot of other facets of their life, whether it's booking a table at a restaurant, booking their car in for a service almost every other business that they're engaging with has some sort of yep digital mechanism to go. I need an appointment, you know hairdresser, barber, doctor, dentist. It's almost all done online and handled by a receptionist, or obviously in rare cases, and so you've got to say, well, why would we be any different?
Speaker 1:What we're also seeing is that for there's this interesting way that's playing out with firms where they might have a slightly older demographic of client and they're starting to consider about okay, so it's not so much about managing wealth, we're now thinking about transferring wealth to the next generation, and so it gets feeding into that intergenerational wealth transfer concept. And, of course, what we're seeing is the next generation of client that's going to be either inheriting or managing the wealth from the benefactor, the beneficiaries. If they're not seeing that modern interface, or if they're not seeing an advice business that appears to be keeping up with how technology should be used in a professional manner, they're thinking maybe this isn't the right firm for us anymore. Let's find someone that's actually going to suit our generation or our needs. I think it's a really interesting consideration there for any business that's thinking about if I'm going to be in business two years, five years, 10 years from now, what if I go be doing the day, to make sure I'm not going to be making some very painfully expensive mistakes along the way Before we come out.
Speaker 1:Peter, last question for you today is really an open question for you to, I guess, flag to the audience that if there was one thing that you'd ask people to either think about, consider or be encouraged and excited about in the tech space relative to our profession, what might that look like? What are really you excited about, or what are some of the trends, changes, what's coming up around the corner that you think is going to really make technology and advice businesses really seem together quite beautifully.
Speaker 2:It's going to be such a cliche, but I am really going to say the co-pilot capability that Microsoft is about to give us all.
Speaker 2:Yeah, cool, yeah, it's just going to touch every role in a business. There's very few times in life where something comes along that really touches everyone's job. When email first happened in South Korea now that was in my career email was kind of happened, it was established. But when email happened or when mobile kind of first happened I remember mobile, I remember first Blackberry there was just the time it just changed the way we worked and I really genuinely feel that we're in this moment now and I would encourage businesses that can afford to do it large business get a few interns in the next couple of years to work over your summer break.
Speaker 2:Kids from uni. They might not want to be advisors, but that's OK, they just want some experience. Who are growing up in this AI world and they're going to think really differently about jobs and tasks and how you do things. Get them in your business and go hey, how would you use this co-pilot? Well, what should we be doing differently? What can we learn from them? I love the saying. I follow his NYU Professor, scott Galloway. That puts a lot of content out.
Speaker 2:And he says that AI won't replace people, but people that use AI will. I just hang on to that and I just think, yeah, so it's not going to be an explain replacement, it's not going to be this or that. Those things will be what they'll be. But I just think it's a ubiquitous change, it's happening to everyone and I just think, embrace it, move mindfully through it and think about it in a way that how can it just make us so much better at what we do? And so that, for me, is the big winner, for the next three months.
Speaker 1:So I think, just, ropta, it's a case of don't be like that person Hang on to a taxi license when it was coming out, thinking that this is going to be the way forward.
Speaker 2:Yeah, and I mean frankly, for a lot of businesses we talk to emails dead. They just use Teams and Slack and these things, even if the Nura, the only email, is over-centered that our clients. And if they have a Slack channel, I'd rather use that with them. So there are moments, and you know what, that's a bloody good thing, because email is terrible. We hate it.
Speaker 2:So I genuinely feel the roles we have in our business, the people in the capability we have in our business, are really going to change and the really exciting thing that business owners and advisors it will hopefully expand the number of clients you can serve at a much more reasonable cost. You have less people doing horrible jobs matching data on spreadsheets and data matching commission reports. People don't go to uni for four years to do that work. They go to uni to be creative and talk to people and build things. And I think, yeah, there's this wonderful change that's going to come through the white collar roles. And the awesome thing about the advice industry is we've got a whole bunch of the IFA small business run by entrepreneurs that can embrace this stuff really quickly. So I reckon be one of those firms.
Speaker 1:Brilliant, that's great. Well, peter, thanks for joining us for our Advice Leaders podcast today. It has been excellent getting to work with you once again, certainly to the audience. I would encourage you to reach out to Peter and Tiffin Nura if you think that they can be of help to you and your business, and wish you all the best luck and success for the future moving forward. Thanks again, peter, thanks, thank you.