Financial advisors and automation

12 July 2023

The financial services industry is undergoing a rapid digital transformation, and this trend is significantly impacting the UK independent financial adviser (IFA), wealth management and personal pensions space. These new challenges include:

  • a talent shortage due to the aging demographic of advisers and lack of new talent entering the industry
  • escalating operating costs due to current economic conditions
  • insurance premiums and compliance expenses
  • as well as a sustained decline in real household disposable income since quarter one of 2020, which can reduce demand for financial advice as well as the ability or willingness to pay fees to receive such advice

In response to these challenges, IFAs are increasingly turning to automation.

While the Financial Conduct Authority (FCA), reports that the number of retail investment advisers is gradually increasing, this growth is occurring within a decreasing number of firms due to consolidation. As a result, larger financial advice firms are becoming even bigger, and are often benefitting from more substantial investment opportunities in automation.

However, the emergence of generative artificial intelligence is also enabling smaller firms to compete in this changing landscape. With technological advancements reshaping the financial services industry, driving down costs and increasing efficiencies, more customers can access financial advice online more easily than ever before. This newfound accessibility has the potential to reach underserved investors who might have been traditionally excluded due to their lower wealth levels. Considering that the average person in the UK holds approximately £17,365 in savings, and the median household income stands at £30,500, it is evident that this represents a vast and untapped mass market.

Consequently, traditional IFAs face mounting pressure to adapt their business models to remain relevant in a digitally driven era.

Hugh Fairclough, lead IFA and Wealth Management Partner at RSM UK says “I am really excited about the opportunity this present for the investment management and advice community. It promises to elevate the client experience and enrich investment journeys, but also serves as a gateway to reach previously underserved segments of the market. Without a doubt, this represents a win-win scenario that benefits all stakeholders involved.” 

How are IFAs leveraging automation?

Our recent Real Economy survey showed that process automation was the second most important action businesses had taken over the past 12 months to combat staffing challenges, with 76% of respondents stating that the successful implementation of automation had directly resulted in improved productivity. 

IFAs are using technology to automate a variety different areas of their business, to boost productivity and maintain personalisation.


The rise of robo-advice is transforming the way financial advice is delivered. Robo-advice platforms leverage algorithms and artificial intelligence to provide automated investment advice and portfolio management tailored to clients' individual goals and risk tolerance. This surge in popularity is driven by the affordability and convenience it offers, allowing IFAs to serve a broader client base.  

The aging population presents both opportunities and challenges for IFAs in adopting robo-advisory platforms. On one hand, there are a growing number of individuals in need of retirement planning, increasing the demand for financial advice. On the other, the acceptance and utilisation of robo-advice platforms may vary across different generations, recent surveys unsurprisingly showing that younger generations are more receptive to this form of advice than older generations.

As the prevalence of robo-advice continues to expand, it is crucial for independent advisers to understand its implications and adapt their strategies to meet the evolving needs and preferences of their clients, whilst at the same time continuing to meet regulatory requirements.

Client data and portfolios

Automated systems allow financial advisory firms to streamline the client onboarding process at a drastically reduced time. For example, automated ‘know your customer’ (KYC) checks can reduce effort and time, while still ensuring compliance. Elsewhere, the use of online forms, e-signatures and automated data collection are all minimising manual paperwork and workflows, and reduce administrative burdens.

To help advisers gain a comprehensive view of their clients' financial situations and provide a more informed and personalised service, automation can be applied to client data to aggregate and analyse, such as on bank accounts, investments and pensions, as well as to automate client risk profiling. Additionally, portfolio rebalancing processes can be automated to monitor performance, trigger alerts and execute trades based on predefined criteria that are aligned with goals and risk profiles of clients’. 

Automated customised reports providing insights into investment performance, asset allocation and progress towards financial goals can be generated for clients, by integrating data from a wide variety of sources. This also provides customers with a bespoke and personalised service as well as contributing to the data required for reporting back to the Financial Conduct Authority as part of their Consumer Duty regime, in force from 31 July 2023. 

Automation can revolutionise the way clients are charged based on the value of assets under advice. By leveraging application programming interfaces (APIs), charges can be calculated and delivered in near real-time, eliminating the need for manual and time-consuming processes to determine the total fund value at a specific moment. This streamlined approach offers greater efficiency, accuracy of fees and convenience for both advisors and clients alike.

Communication and marketing

Evolving client expectations, driven by advancements in technology, have created an expectation for an accessible digital interaction with a financial adviser, while simultaneously maintaining a personal touch. To address this, automation is used within the industry to streamline client communication and engagement, such as sending regular updates, newsletters and personalised notifications.

'Chatbots’ are also proving popular in assisting with personalised digital interactions. With the use of generative artificial intelligence, chatbots can now take a far more tailored approach to handling client queries and providing instant support. Personalised marketing content can also be generated using automation, with personalised social media content, events, blog websites and videos.

While automation can seem detached, the rise in technological tools, particularly generative artificial intelligence, can still allow for a personal focus, equipping advisers with the tools to provide an even more bespoke service with a more ‘hands-off’ approach.


Advisers are able to automate tasks, such as reconciling transactions, managing fees, streamlining billing processes and other administrative responsibilities, which free up time to allow them to focus on tasks that add value to their clients. Automating these tasks can reduce the requirement for administrative staff, while also minimising errors and improving accuracy in financial calculations, with the added benefit of enhancing the customer journey with such a streamlined approach.

Reporting and compliance

Cutting-edge compliance monitoring tools play a pivotal role in tracking and auditing regulatory compliance by constantly flagging issues, operating 24/7. These tools are designed to enforce adherence to regulations, thereby minimising risks associated with compliance. As a result, employees are relieved of a substantial burden in performing compliance tasks. One notable example is the automation of KYC checks, which not only significantly reduces effort and time but also enhances the speed and effectiveness of achieving compliance objectives.


Despite only approximately 8% (4.1m) of all UK adults having received financial advice, the FCA wants to make investment advice much more accessible, leading to a rise in demand. Automation can significantly enhance efficiency and scalability for IFAs, and with the evolving customer expectations, IFAs need to adapt and leverage technology to enhance their services and remain competitive. Moreover, automation can also make previously underserviced markets more attractive to IFAs because the client advice cost is reduced. As with any digital transformation, it is important for IFAs to consider the risks that come with implementing of new technologies, such as regulatory compliance, data privacy and security and cyber risk.  It is crucial that there is a clear understanding of the tools used for automation to ensure effective control and compliance, particularly where the technology is outsourced.

The rise of automation, particularly with generative artificial intelligence, is set to transform the IFA space. While emotional understanding and personalised client service have traditionally been seen as crucial aspects of financial advising, technological advancements offer opportunities to maintain a human touch and build strong client relationships. 

By leveraging automation, IFAs can boost productivity and focus on creating value for their clients, while still emphasising the personal and emotional nature of financial matters. Though automation can help articulate and humanise financial information, arguably, it cannot replace the connection that only comes from human interaction. Maintaining a balance between automation and personalised client service remains vital in the financial advisory industry.