A recent Investment Trends survey of more than 1,000 investors, which included self-managed superannuation trustees, found that 25 per cent of respondents are ‘do-it-yourself’ investors and are not interested in any professional advice, while 50 per cent said they were open to advice services.
Of that 50 per cent who are interested in advice, many are increasingly interested in scaled advice, Investment Trends senior analyst Recep Peker told the 13th annual Wraps, Platforms & Masterfunds conference in the Hunter Valley yesterday.
“What we are finding is that very few Australian investors are interested in full comprehensive advice,” Mr Peker said.
“Rather, they are interested in modular advice; so there are plenty of opportunities for planners to scale their advice services and look seriously at this.”
However, BT Financial Group’s head of platforms and insurance, Kelly Power, told the conference that there are concerns about the implementation of scaled advice in practice.
“There are suggestions that scaled advice will be just as expensive to advisers as comprehensive advice – but something needs to be done about this. We can’t have a situation where they cost the same,” Ms Power said.
More broadly, Ms Power said that an increasing focus on cost-efficiency from platform providers and the financial institutions will help make advice cheaper to provide, thereby allowing greater access to advice for a range of consumers.
“It is a serious problem that those consumers who most need advice often can’t afford it,” Ms Power said.
I would point out that the platform an adviser utilises is just a very small part of the “Advice” solution. Not much use having a cheap platform if it doesn’t do the job or the platform provider goes broke. The quality of the advice comes down to who’s providing it, their experience, systems used, knowledge & strategies employed, asset allocation and investments selected, ongoing service and reviews. Not much us having a great gun to shoot but a useless operator or dud bullets. Industry Funds Advocates take note.
So, are we to use surveys to determine our business models.
And when did platform providers become the advice experts- oh! I remember, it was when they decided that no matter what a clients’s need their product is the answer. ditto Industry funds.
Seriously, common sense says that I owe a duty of care, when advising my client, to take account of their total situation, and this part is often the most costly. The recommendations which flow are the lowest cost part of the advice process. Hence there would seem to be little advantage to scaled advice, that is unless some perceive this to equate to scalded Know Your Client.
So know they have a name for it officially, Lets Party !!!!!
agree with dave.
It used to be known as limited advice but scaled advice is sexy (!!!!!!)This has always been an option, why the drama. Clients have always made a conscious decision regarding the level of advice, but as you know, if you know your client well and don’t consider other relevant facts- there will always be a contingent claim. Choose your clients well and stick with holistic advice. There is too much “noise” regarding what we should do, be the master of your own business and stick with what you know best.