Superannuation funds should develop intra-fund advice models to better address the rising cost of financial advice for members, Rice Warner said in a blog.
“These are simple single-issue pieces of advice which are given free to members or provided at a nominal cost,” it said.
“As more members approach retirement, where the circumstances are far more complex, the demand for personal advice will grow. Yet, no fund has yet been able to marry the needs of members approaching retirement cost-effectively.”
Rice Warner said technology offers one avenue for satiating the tidal wave of incoming demand. It cited recent research from ASIC that found that while the take up of digital advice is still low, 37 per cent of those who didn’t go ahead with their plan to receive advice would consider digital channels instead.
“Not only can digital tools provide an alternative for members seeking advice at scale, but they can also increase engagement,” Rice Warner said.
“Research by CEPAR (Centre of Excellence in Population Ageing Research) in association with Cbus has shown that just providing members with a retirement income estimate on their annual statement increased both the proportion making voluntary contributions and value of those contributions by a third or more.
“One can only imagine the cascading effect that digital delivery of such estimates could provide, with the option to take it further through online tools that can provide personal advice, with pre-filled information from the fund registry and the option to implement on the spot.”
No wonder advisers are leaving in droves. Costs of running our businesses are going up, whilst clients want to pay less and less each year. Unless something big changes this industry is as good as DEAD.
Having worked in the standard and robo advice space, I can say that the key here is in demonstrating the value of the advice being greater than the nominal fee. When I first started para-planning, the adviser would work tirelessly to find the best strategy to save the customer money at retirement and over the coming years in cashflow. Merely comparing two products MER’s or ICR’s or whatever the fee is these days, is not enough. Product is a by-product of the advice. Unfortunately, those who most require advice, are those least willing to pay for it, because they can least afford it. As a user, most tools are difficult to use, clunky or too detailed.
[quote=Miss you Terry McMaster]I think they all alluding to justifying Robo advice. Can Robo advice really help? Here is a thought from one of our ex-luminous adviser. https://www.adviserinnovation.com.au/2017/09/15/ai-future-financial-planning/%5B/quote%5D%5Bquote=Miss you Terry McMaster]I think they all alluding to justifying Robo advice. Can Robo advice really help? Here is a thought from one of our ex-luminous adviser. https://www.adviserinnovation.com.au/2017/09/15/ai-future-financial-planning/%5B/quote%5D
BRING HIM BACK!
The report is wrong. Clients want to pay nothing.
As the Darryl Kerrigan was quoted.. “tell’em their dreaming”….
Love this, it really does show financial planning as a profession has a loooongggg way to go lol, who can do advice for less than $3,000 to start ? Lol
RC + BI + Hayne = $6,000 plus initial
Money spent in a first meeting and diary note
Is anyone really surprised? Whether you agree or not the survey is saying what value people see in advice. No point complaining, just justify your fees and if the person is happy they will pay it.
But let’s face it a few advisers have grossly overcharged clients sometimes in initial advice but certainly more often in the on-going fee. I really see the ongoing fees as the problem area because if you have set the plan up properly, and I’m sure there will be a barrage of disagreement, your actual costs to provide an ongoing service is minimal. Of course though the ridiculous compliance requirements around paperwork required for on-going service is grossly increasing costs. With the amount of information clients have access to during a year the amount of “stuff” you can tell them at a yearly review they already know. So much of what goes into an annual review is actually “robo-advice” delivered by a person.
If you are charging your client $4,000 for a piece of advice put your hand on your heart and tell them that you spent 10 hours exclusively on their plan at a rate of $400 per hour. And be able to justify the $400 per hour rate which you should be able to do quite easily.
I think they all alluding to justifying Robo advice. Can Robo advice really help? Here is a thought from one of our ex-luminous adviser. https://www.adviserinnovation.com.au/2017/09/15/ai-future-financial-planning/
Ah, Warner Bros. We all do so love your imaginative work (and your theme park).
Intra-Fund advice should be free.
McDonalds offers a Big Mac and a Quarter Pounder.
They offer it to anyone and everyone.
It’s up to you to make an educated guess as to which one you can stomach better.
Same with intrafund advice.
Totally agree with comments below. ASIC wants the earth and clients don’t want to pay for it.
Why don’t the AFA, FPA, AIOFP SMSF etc , start lobbying the government to allow a tax deduction for advice fees up to $ 5000? That is not asking much for professional advice. After all the them medical profession get most of their bills paid by the government or insurance- rarely by the individual themselves. We need to get smart about using our clout and more importantly start driving the narrative rather than letting the government keep calling the shots .
Thanks i needed a laugh today
And this is why Joe public will not get a look in. Advice is now the purview of the well off. Well done to all concerned.
If they want a 2 page generic document similar to a Wholesale Investment Memorandum then they can have it for $500. If they want a SoA as prescribed by ASIC & Hayne then they will have to pay the $4,000+ it currently costs
If it is a generic piece of paper it can be provided for less than $500. You sure can’t give advice as designed by ASIC for less than that – in other words the people can do it themselves and hope they get it right.