For Craig Keary, CEO of Ignition Advice for Asia Pacific, digital advice plays an important role in making modern solutions accessible, affordable and more streamlined.
According to him, there are five main barriers that financial advisers can address to deliver results to a larger audience.
Cost
According to Mr Keary, accessing financial advice today has been found to cost around $3,500 a year, which is “significantly higher than the $500 that research shows most Australians are willing to pay”.
Mr Keary said that with digital advice, financial institutions can reach more customers in a compliant, economic, and scalable way, significantly reducing the cost of delivering that advice.
Complexity
He explains that many people don’t believe their financial circumstances are complex enough to justify getting advice. Most prefer to only receive support in specific situations or life events, and delivering advice in only one area can still be expensive.
Digital advice is “ideally suited to delivering single-issue personal advice to mass affluent and mass customer segments”.
“Delivering advice on superannuation investment options, contributions, investing outside of super, or taking up insurance for a specific life event or phase, is all easily achieved,” he continued.
Confidence
Mr Keary explained that “many consumers lack the confidence to engage with traditional advice channels.”
He said that institutions that offer digital solutions can provide human adviser support while still accessing advice in private.
Compliance
Delivering advice becomes increasingly expensive due to compliance requirements that advisers must meet, Mr Keary said.
Digital services can counter these by “ensuring streamlined and fully auditable data collection, consistent recommendations and experience, and guardrails which limit the scope for idiosyncratic behaviours and conduct risk”.
Convenience
Mr Keary believes that consumers will often not access advice if it’s not in a way or at a time that suits them.
“Digital advice removes the barriers created by the “five Cs” by helping to make advice affordable and easy to access,” he said. “Not only in time and location but also in terms of privacy for those with money sensitivities.”
To learn more from Craig Keary, read here.
