Craig Keary, Ignition CEO Asia Pacific, says the digital advice provider’s paper tackles the “growing tension” between the growing demand for personal advice and the limited human advice capacity of super funds.
“To date, that tension has often been resolved by the member seeking advice elsewhere, also often resulting in the member leaving the super fund,” Mr Keary said.
“Unsurprisingly, many super funds see that as an unwelcome and sub-optimal outcome after years, perhaps decades, of building the member’s account balance.
“Our blueprint explores how the application of digital advice technology to greatly expand intra-fund advice capacity offers a solution to this problem, making high-quality and affordable financial advice accessible to every member who would benefit from it.”
Ignition’s paper also looks at ASIC’s intra-fund provisions and outlines the economic benefits of a digital advice solution for super funds, which Mr Keary argued substantially increases a fund’s advice capacity in a cost-effective manner.
“A hybrid digital advice model allows a fund’s human advisers to be redeployed to support members requiring personal assistance or with complex needs, while technology addresses the most common intra-fund advice needs,” he said.
“In essence, the hybrid model creates the capacity for a fund to deliver on underlying member demand for intra-fund advice.
“This means funds can address the advice gap, serve more members at lower costs and ultimately help more members access the benefits of advice to achieve better retirement outcomes.”
In April, Mr Keary told ifa that the government’s terms of reference for the upcoming Quality of Advice review (QAR) in December highlights the importance of technology in financial services.
The QAR’s terms of reference state that the review will consider the use of regulatory technology and digital advice and will “pay particular attention to how technology and digital advice might enable mass market adoption of low-cost advice”.
“It reflects the growing maturity of the financial advice industry, the government and regulators, in acknowledging the important role that technology will play in making financial advice more accessible to more Australians, in a cost-effective manner,” Mr Keary said.
