The Broken Financial Advice Process: Who’s to Blame? | Derek Smith, Aberdeen Adviser

Find out more about Aberdeen Adviser: https://fpl.partners/aberdeen-adviser Connect with Derek Smith on LinkedIn: https://www.linkedin.com/in/derek-smith-b687721/ Why does the financial advice process still take seven systems and seven hours? Derek Smith, Chief Product & Technology Officer at Aberdeen Adviser, joins Sam Oakes on Financial Planner Life to explain what is broken for UK financial advisers and financial planners, who is to blame, and how AI could fix it. A financial adviser finishes a client meeting and then starts typing. The same details go into seven different systems, and roughly seven hours disappear into keying a single advice process before any advice is written. Derek has spent 27 years in product and technology, across investment banking, trading, start-ups and a fashion tech company. He says the software financial advice firms use is about 20 years behind the apps on your phone. He calls the problem the three sevens: seven pieces of software, seven hours of keying, client data rekeyed up to seven times. Aberdeen Adviser supports around 2,500 financial advice firms and £80 billion of assets, takes roughly 350,000 calls a year, and believes 70% of those calls exist only because of friction in the advice process. QUESTIONS ANSWERED IN THIS EPISODE Who is to blame for the broken financial advice process? Derek says it is shared. The advice firm owns the end-to-end journey for its client. Platforms and advice tech providers own their part of it, and have been too slow to work together across it. How much does it cost a financial planning firm to serve one client? On average £1,500 to £2,500 a year across the firm's whole cost base. That is why many financial planners will not take on a client with less than £250,000, and why 30 to 40% of a typical financial planning book is unprofitable at any one time. Why are financial advisers serving fewer clients? Five years ago the average UK financial adviser served 120 to 125 clients. Today it is around 100, and the advice gap is widening. Can AI reduce the cost of financial advice? Derek believes a financial advice firm built from scratch today, on connected data and AI, could serve a client for under £500 a year, within 12 to 18 months. What should financial planners do in the next six months? Test conversational AI tools that work across your data now, and redesign your advice and service processes end to end rather than chasing 1% improvements. ALSO IN THIS EPISODE • How Aberdeen Adviser is handing back a million minutes of adviser time • CRM integrations with Intelliflo and ZeroKey that end rekeying • The data quality problem that makes AI risky in a regulated advice firm • How Derek would build a financial advice firm from day one • Why a one-person financial advice firm could be 18 to 24 months away This episode is for financial advisers, financial planners, paraplanners and advice firm owners weighing up their tech stack, how far down the asset scale they can afford to serve, or whether to start building with AI now. Find out more about Aberdeen Adviser: https://fpl.partners/aberdeen-adviser Connect with Derek Smith on LinkedIn: https://www.linkedin.com/in/derek-smith-b687721/ Financial Planner Life is sponsored by Redmill Advance Whether you're starting out, already qualified, or building a training academy, Redmill Advance delivers expert-led learning, exam support and CPD from Level 4 to Chartered. ✅ Trusted by top UK firms 👉 www.redmilladvance.com/fpl Be sure to follow Financial Planner Life on YouTube for extra content about  career development within Financial Planning.  Want to appear on the Financial Planner Life podcast? Reach out to [email protected] Reach out to [email protected] in regards to sponsorship, partnerships, videography or podcast production.