In a recent XY Adviser podcast episode, the wealth giant’s chief executive, Renato Mota, said advice businesses should be more focused on how to assist lower income clients as shifting industry dynamics made it more challenging for advisers to do so in a traditional form.
“One of the challenges for our industry is that everyone deserves the right to have confidence in their future, and that’s a big part of what the industry should be delivering to society generally,” Mr Mota said.
“There’s a great opportunity for IOOF to play a bigger part in that, in supporting the community. That help will look different for [different people] – it will be based on their age and their life needs.
“So it needs to be customised, but I think we fall into the trap of talking about advice in a narrow context – we talk about it as a holistic relationship that is full service.”
Mr Mota said the sector would benefit from “broadening our interpretation of what advice is”, and coming up with services that were not necessarily full personal advice, but would keep a consumer engaged through periods of their life where they may not need full advice.
“There are other forms of assistance or help that people can benefit from that may not be a personalised advice relationship – it may be purely budgeting, literacy, coaching, but they are all forms of advice,” he said.
“One of the criticisms I’d have of the industry, and I’d include IOOF in this, I think we’ve tried to solve tomorrow’s opportunity with yesterday’s thinking. We’ve used the models that have brought us this far to solve for the opportunity of tomorrow.
“I think we’ve tried to go from a holistic model and scale that down, but in reality maybe we should start with a blank sheet of paper and build something that’s fit for purpose.”
Mr Mota said the transition of the global economy towards a service-based economy created enormous opportunities for advice as an industry, but the traditional product and investment-focused model needed to be overhauled to be more client-centric.
“In the last 100 years we’ve seen economies go from making products in the ’50s and ’60s, and in the ’80s and ’90s it was a sales oriented economy, we sold stuff. Where we’re heading now, and I think we’ve seen this in other industries whether it’s media or retail, we create client experiences and outcomes,” he said.
That customisation orientation plays directly into the hands of advice – that’s where the greatest value is for the client.
“There are elements of the advice industry where we’ve customised the wrong things – we might customise an investment portfolio because we think picking one manager over another is a point of difference,” Mr Mota said.
“But is that what matters to the client, or can you create a more homogenous system that improves the quality, reduces the cost of advice delivery and allows you to focus more effort into the things that matter to your client?”
Hard not to innovate without regulation. If there were no rules then a lot of people would get hurt just because someone’s innovation is considered better than someone else’s. As humans we unfortunately need rules , otherwise history repeats itself.
[quote=Anonymous]Hard to innovate when you have both hands tied behind your back. Reduce the ridiculous amount of regulation and then we’ll talk.[/quote][quote=Anonymous]Hard to innovate when you have both hands tied behind your back. Reduce the ridiculous amount of regulation and then we’ll talk.[/quote]
Disagree
Regulation inspires innovation. Look at all the clean green technologies that have materialised just because we have said no, using legislation.
Hard to innovate when you have both hands tied behind your back. Reduce the ridiculous amount of regulation and then we’ll talk.
Interesting when IOOF is culling the advisers in their network with smaller books and lower wealth clients. Robo is not a way to engage with a client but try telling IOOF, we did and they didn’t listen. IOOF want what IOOF want, that is to be big bad and ugly just like the banks vertically integrated businesses run for the benefit of the licensee.
Both IOOF and AMP are singing out of the same hymn book:
– Let us roll out a huge robo-advice system to ‘help the community’ (the doublespeak is enough to make you laugh) a la flog crummy products to people.
– We’ll keep some rump of an adviser network to ‘service’ the high net wealth end (i.e., try to flog crummy products to rich people).
– We’ll use the conversation around affordability to make things easier for us, not our advisers, because really, who cares about advisers?
The nonsense pouring out of his mouth into these quotes represents a complete disconnect from the reality of giving advice, with the added twist of an inherent bias towards maintaining the awful status quo because it pays him his not-insignificant salary.
He and his ilk will never understand that they are a big part of the problem. Always have been, always will be.
says someone who has never given actually advice under an AR?
I agree in principal, however its current regulation and the related costs that are the largest barrier to this being a reality. All the change in thinking doesn’t help alleviate that issue.
If you want to provide advice and lower delivery areas of advice to many more Australian’s, it needs to start at the legislative instrument level. Most advisers want to be able to do this, but it needs to be cost effective and viable to deliver. The current requirements for providing advice unfortunately come with an attached cost to provide that advice, which is only further increasing with additional levies and additional legislative requirements being thrown on top of the existing ones yet again.
Visions are great, but these need to be shared with people that can actually legislate a change, not the choir that’s frustrated about not being able to do so.
Let me guess……his solution is for advisers to work for nothing and recommend IOOF products. Should work out pretty well for the clients.
So Renato, bearing in mind your not insignificant CEO salary, what does the delivery of affordable, ASIC compliant, litigation risk free, quality advice look like? I can assure you it’s easier said than done. Surveys have been run in the past where consumers overwhelmingly responded that on average they were prepared to pay $200 for Financial Advice. Consumers seem to think it’s like a visit to the dentist for a clean and check-up. Also, Financial Advice is not a “Right” as you put it, just as Legal, Tax or Accounting Advice is NOT a right. It is a service that one pays for at professional rates. Until ASIC calms down and Parliament sets the scene for 1 – 2 page scaled advice pieces, things won’t be changing in a hurry….particularly with predatory law firms hovering overhead looking to invent causes of legal action.
Yes, we need more general advice, sales people being allowed to call what they are doing ‘advice’. IOOF will prosper and what is good for IOOF is good for Australia.
Until the next Royal Commission.
This shows now out of touch he is with the advisers under the banners they own. If he actually had taken the time to speak with business owners and advisers outside of what his yes men are saying then he would know this.
I hear a robo advice model coming on for IOOF. Watch this space.
No such thing as “roboadvice”. It’s just a pretentious name for digital sales tools.
A lot of words in that. I really do not think Mr Mota understands the advice process fully nor the compliance regime which over arches every aspect of it.
I think he is talking about Robo Advice without using those words.
What needs to change is the current UNWORKABLE compliance regime. Its pretty simple.
Th compliance issue caused by many of the IOOF manager’s whose bum graced the RC seats.