The Assets Under Advice business model - used by many Financial Planners - is broken and may be finished, leading tech guru Ian McKenna told the CISI Annual Financial Planning Conference today.

Mr McKenna, chairing a tech panel at the event, said the assets under advice model would no longer work for advisers in the future.

He said a key issue was that younger generations of clients, those under 45, would simply not have enough assets to generate sufficient income for Financial Planning firms.

Many Financial Planning and IFA firms rely on the assets under advice or management model, charging a percentage fee for their advice based on clients' invested assets.

Mr McKenna said: "This model is going to break for under 45s."

Economic challenges for younger generations would mean they would have lower assets than their parents' generation, he predicted.

The tech consultant also warned planners they were failing to reach younger savers who were turning to new offerings from digital firms such as Moneybox and Plum.

He said planners dismissed these new firms at their peril because they were, "capturing the next generation of savers."

Mr McKenna, founder and director of the Financial Technology Research Centre (FTRC), was speaking at a session called: Technology under the Spotlight: Future of tech, one of the key sessions today.

Panellists included: Oliver Bourke, managing director, Mercury Wealth Management; Josh Butten CFP, director, boosst and Jon Doyle, founder and Financial Planner at Juniper Wealth Management.

Panellists discussed using tech to build a revenue model that works for clients with lower assets, digital presence, useful pieces of technology and a tech wishlist.

Mr Doyle said planners should leverage their data through technology to turn into into a powerful tool to provide customer insights and show patterns of behaviour.

Mr McKenna also urged advisers to use the software they already had in their firms better. He said many advisers he had reviewed used only 20% of the functionality of their software. Firms should also invest more in tech training to use software more efficiently, he said.

The CISI’s flagship annual two-day Financial Planning conference has been taking place this week at Wotton House conference centre, near Dorking, Surrey, and has attracted more than 300 attendees.

It features dozens of expert and distinguished speakers and, this year, a focus on technology which can be used to build the future of Financial Planning.

•Conference hashtag: #financialplanning23