In a presentation at IMAP’s InvestTech 2017 conference, Praemium head of distribution Martin Morris said the industry is “letting clients move further and further away” by failing to improve the ways they interact with clients.
“Technology is significantly changing how we run our businesses. If you asked clients to reflect on how they engaged with their adviser 10 years ago to how they do it now, and mapped that to the significant change in technology, I’d argue it hasn’t kept pace,” he said.
“Just by an intuitive mathematical equation, that means our clients are moving slowly and slowly away from us. It’s like a slow-burning death.”
Mr Morris pointed to data from ASIC that shows the volume of the investible population seeking advice hasn’t notably increased in around eight years.
“In 2009, ASIC did a study which found only 20 per cent of the investible community uses an adviser – that figure has not gone up in any drastic way,” he said.
“For all that technology is doing, we aren’t seeing a fundamental change in the amount of consumers that see us as a profession – we aren’t seeing a massive amount of change in our referral networks, and this is a really worrying statistic.”
Mr Morris cautioned that client demographics are changing, and advisers need to move with them.
It is a flawed assumption that the market for financial advice is greater than 20% of the population. Think about it. What percentage of the population have a meaningful level of investments or income to require advice ? And out of those that don’t – how many are able to afford/or prepared to pay for advice ?
Agree with aboice comments AFA & FPA are supposerd to support advisers
New Years resolution for the leaders of the AFA and FPA…
To help reverse this trend why not try a new approach and not just more of the same…
How about a unified (and relentless) approach with this outcome top of mind :
Ensure that more Australians are able to seek tax deductible financial advice delivered to them in a cost effective manner with less red tape regulation…
That young Mr Morris has missed the point – that financial advice is now evolved into being less about investing (we, he and others know precious little about investing because it’s largely guessing future outcomes) and more about the whole range of issues relating to all financial matters…with a little investing thrown in on top. Good advisers are collaborative rather than didactic – especially with those who HAVE money – and teachers to those who don’t. The “investible community” is an interesting term; it demonstrates some of the problem of perceptions about who needs advice.
Congrats to ASIC; mission accomplished: make it even more difficult for: (A) consumer to afford advice and (B) advisers to provide the advice. As for the toothless AFA and FPA, don’t get me started.