In a recent panel session at AIA’s Adviser Summit, AFA national president Michael Nowak said it was “appropriate” the government establish a working group to mandate consistency and portability of data between different technology systems, amid discussions of fintech as a key solution to address advice affordability.
“Jane Hume has flagged technology as being a major game changer, so I think it’s appropriate for the minister to call together an industry working group,” Mr Nowak said.
“We need to see the integration of technology from an advice delivery point of view – there’s so much tech out there but [the systems] don’t talk to each other, so in order to use them we use one software program here and another one here.
“It’s essential we can gain access to one set of data points [and] for technology to be used in a way that makes it more efficient.”
Mr Nowak added that a “regulatory ceasefire” was also needed to give tech developers certainty to invest in the industry.
“We’ve been in an environment that is increasingly changing, and this could be seen as a disincentive for technology to come in because there’s just so much uncertainty about what the future holds,” he said.
Netwealth joint managing director Matt Heine agreed that it was essential advisers be able to slim down their technology stack to properly leverage the scale and efficiency needed to reduce the cost of advice.
“Our research suggests at the moment the average firm uses between 13-15 different [technology] systems, and most of those systems have overlapping features,” Mr Heine said.
He added that given subscription costs for the different systems in place, the average “cost per seat” to operate all the different pieces of software required in a practice was $10,000.
“As an industry the first thing people should be looking at is simplifying their tech stack. The costs are huge and it’s hard to innovate when you have 15 different systems that don’t talk to each other,” Mr Heine said.
“Having a consistent database that’s synced across all your core systems is going to be critical.”
There’s multiple tech challenges all playing out in the Industry and it’s definitely time for change. Too many systems and lack of integration is normal across most industries. But unique to Finance is the huge and ever-growing regulation and the inability to keep up with it. Systems must stay up to date with the regulators and make a planner’s job easier. Not harder. And at the same time increase compliance by utilising AI (artificial intelligence) and automation. Other industries are using AI and automation with great success. -Circle8
If there’s one thing advisers hate more than over complicated regulation, it’s slimy tech companies trying to cash in on over complicated regulation.
An astute industry commentator called them tech ‘piles’ rather than stacks. The AFA getting involved in technology will turn them from piles to dust.
Personally, I don’t want Government anywhere near this. The less Government intervention the better.
The solution to unnecessary regulatory complexity is regulatory simplification. It is not “Fintech”.
“Fintech” certainly has some benefits for core advice processes. But it is a clunky, expensive, workaround for advice inefficiencies caused by unnecessary regulatory complexity.
MIA Jane’s promotion of “Fintech” as a faux solution to unnecessary regulatory complexity shows she doesn’t have the competence or willpower to implement real solutions. She needs to be replaced by someone who does.
100% Agree, it’s MIA Jane’s “Get out of Jail Free” card, that Robo / Tech Advice will help with the over the top BS REGS world created by Pollies and ASIC.
There is not any Robo / Tech system that can do ALL the masses of BS REGS that we are strangled by.
It WILL NOT HAPPEN. I will bet anyone, MIA Jane or others what ever they like, nothing will happen Tech wise and Robo wise unless REGS reduce.
And even if it was possible to develop, it would be so complex to use, mum & dads would need Advice on how to make it work or use it. And it would be very detailed and long to be compliant.
[b]The only Real World Solution = Massive Reduction in BS REGS + MASSIVE Back the hell Off ASIC. [/b][b][/b]
I think that is Government’s ultimate plan, namely to reduce advice regulations once there is evidence that advisers can be trusted to self-regulate like other professions without all the complex regulations.
We just switched from XPlan to AdviserLogic. I am glad we did. Very much worth it.
We cant even get access to the ATO portal so I wouldn’t be holding my breath the government would be doing anything to help. There should also be an easier way to access clients super fund data from product providers whilst completing research for clients. Sending and calling in regards to third party authorities, which most Industry Funds “lose” is time consuming.
about friggin time