Advice firms are adopting different approaches in response to their frustration at the challenges posed by fragmented systems and poor integrations, according to NextWealth.

Its latest Adviser Tech Stack series found that firms were deploying one of three approaches to deal with complexity, and the trade-offs they are willing to make between cost, efficiency, risk, and disruption.

NextWealth defined these differing approaches as ‘optimisers’, which are focused on extracting more value from their existing systems rather than replacing them; ‘transformers’, which are rebuilding their tech stack from the ground up; and ‘wait-and-seers’, which are holding off on change and watching the market before making any major decisions.

The advisers surveyed highlighted that while individual systems can work well in isolation, the lack of seamless connectivity remained a critical weakness.

They warned that even the strongest performing systems struggle to deliver their full value without better connectivity.

NextWealth argued that a fragmented tech stack does not just slow advisers down, it also undermines operational efficiency, weakens the client experience, and increases compliance risk.

“Faced with the challenge of a fragmented tech stack, firms are creating their own coping strategies,” commented NextWealth associate research director, Chanelle Paynter.

“Some are doubling down on existing systems to optimise performance, others are rebuilding their stack from the ground up, while a third group is holding back, waiting for greater market clarity before making changes. In each case, the driver is the persistent pain point of fragmented systems.”

The report noted that most firms begin with back office systems that were not designed around the current financial planning process, adding platforms, risk tools, cashflow modellers, client portals, and AI over time to meet evolving requirements.

This often results in a patchwork of partially integrated tools, duplicate processes, and multiple logins, NextWealth added.

“Financial advice professionals are increasingly vocal about the burden this creates. Rather than feeling empowered by technology, many describe being weighed down by it,” Paynter stated.

“The reality for most financial advice professionals is that they have to rely on a tech stack which doesn’t function like a stack. All too often - and firms would argue for far too long – the technology they use is siloed.

“Even when not entirely disconnected, their tech ‘stack’ often resembles a patchwork of partially integrated tools, duplicate processes, and multiple logins. To add to the frustration, some integrations come at an extra cost.”

NextWealth asked advice professionals about their sentiment towards different adviser technologies, and platforms had consistently been the highest-rated category over the past five years.

Back office systems remained the weakest link, with advisers expressing frustration with integration, usability, and lack of innovation.

Cashflow modelling, risk profiling, and client portals showed small declines in user reviews.

NextWealth highlighted that stability across the rankings was evident, as while user reviews moved up and down, no category shifted position in the rankings, with platforms top, cashflow modelling in second, risk profiling third, client portal fourth, and back office systems fifth.

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