Data, compliance key to successful technology-enabled advice

While financial advice firms are at different stages of embracing artificial intelligence (AI), experts urge not to overlook two key areas before they go all in: data quality and compliance.

Before considering anything else, a panel of technology and advice experts stressed the importance of starting at the ground level - improving client and investment data before leveraging AI over it.

On the final day of the Stockbrokers and Investment Advisers Association (SIAA) Conference in Melbourne, Flextrade vice president of business development James Hammond said the reality is "no one sorted out their client data," meaning investments data is housed in disparate platforms and not easily accessible at once.

"If your data is rubbish, it doesn't matter what AI you put on top of it, it's rubbish in, rubbish out," he said.

In the context of adopting technology-enabled advice, Padua Solution managing director and chief executive Matt Esler said advisers need to lean into compliance as they are fiduciaries of clients' wealth.

Applying quality assurance throughout the process - from advice guidance to advice generation - or "audit in real time" is where the industry should be moving towards.

As an example, Esler shared Padua has 15 compliance managers whose jobs changed drastically with the implementation of AI.

"Applying Padua's AI quality assurance capability called Aqua meant those people didn't lose their jobs. They moved to the front of the funnel, and now they're involved in discussions with advisers and talk about strategy and advice again," he said, warning that gone are the days where advisers check a plan after it has been issued.

"Once the advice has been provided to clients, it's too late. This idea that compliance groups and consultants do four checks on client advice per year is a huge risk to the industry."

The end of the process culminates in an "ASIC-level, AFCA-level and a licensee-level audit" in pre-providing and post-providing advice to the client, capturing any issue prior to implementation.

What is also needed, according to Hammond, is a change in adviser mindset because another reality is management teams are "nervous about changing anything" and their advisers will join a competing firm.

"It's the advisers' responsibility to give some reassurances to their management teams that they want to make their lives easier. That they want to be more efficient," Hammond said.

"These things aren't going to happen unless the advisers are willing to. You don't need to become a software engineer. You just need to be open to the idea that the way you engage your client and the way you don't manage your daily tasks could potentially be done better."

Financial Standard is the official media partner of the 2026 SIAA Conference.