Craig Keary, Asia-Pacific chief executive of digital advice provider Ignition believes that rising costs due to regulation has attributed to declining adviser numbers and “the ability of the industry to deliver advice at affordable price points”.
“This advice gap can only be solved by digital advice technologies – there is no other realistic route to providing low-cost, consistent, compliant, robust personal advice at the sort of scale required to materially close the advice gap,” he said.
“The main hurdle for the industry is a lack of conviction about whether digital advice can be delivered in a compliant manner, at scale. This contrasts with the UK financial services industry, where the value and compliant nature of digital advice is now well-accepted by institutions and moving towards mainstream adoption.”
Ignition highlighted this viewpoint in its submission to Treasury for the draft terms of the upcoming Quality of Advice review which also offers a “definitional framework” of digital advice for the industry.
“In our view, digital advice is the digital delivery of personal advice, and a related Statement of Advice, which complies with the Best Interests Duty and other obligations, and encompasses retirement, insurance and investment needs,” Mr Keary said.
Appearing on a recent episode of the ifa Show, Mr Keary claimed that technology adoption in advice has been accelerated by five years due to the impact of the COVID-19 pandemic.
Listen to the full podcast here.
The primary way to solve the problems caused by bad regulation is through better regulation.
Technology is a potential enhancement to financial advice processes, but it is not a solution to the regulatory mess. And it certainly isn’t an excuse for incompetent Hume to abrogate her responsibilities for fixing that regulatory mess, as she seems to think.
Any technology spruiker that tells financial advisers we need to accept bad regulation and buy his product to help us cope with it, doesn’t deserve our business.
I don’t disagree about the regulation issues Hume has created, but to use that as an excuse to not proactively control the controllables in a business shows a lack of acumen. You keep waiting for a miracle while whining. I’ll keep proactively pressing ahead.
One way to control the controllables is by lobbying, campaigning, voting, and selective purchasing. Meekly accepting bad regulation and forking over cash to spruikers aligned with the cause of the problem is giving up too easily on what can ultimately be controlled.