Appearing on the latest episode of the ifa Show podcast, FinClear head David Ferrall – who joined the show to discuss FinClear’s new digital facility – discussed regulation’s role in technology for the sector on the back of the Quality of Advice Review (QAR) reference sheet released last month which will examine digital advice.
The government also announced a number of technology-focused initiatives in its pre-budget announcement.
Mr Ferrall said while there is reason for the advice industry to be optimistic about the attention being put on technology, there are still some questions to be answered.
“The problem at the moment is just the disconnect that’s going on in terms of advice and how it’s delivered,” he said.
“There’s this big question mark about how personal advice, individual advice survives versus robo-advice, artificial intelligence.
“The problem we’ve had is just the cost of that advice and it hasn’t worked for lower account holders to get access to good advice.”
Mr Ferrall said he expects artificial intelligence and robo-advice start to be applied, as well as social media influencers – or “finfluencers” – which ASIC has addressed specifically in recent weeks, even releasing an information sheet to provide clarity on how the law applies to influencers and the licensees who use them.
The corporate regulator said at the time: “If we see harm occurring, we will take action to enforce the law.”
“The end result is going to be better advice, more efficient, cheaper advice for retail investors. That’s the point,” Mr Ferrall continued.
“… the technology is going to translate ultimately into solving problems for advisers to deliver advice. Like I said, whether that’s through robo or artificial intelligence or other means, or it’s still through an adviser over a phone or via email or however they work with their clients, that hasn’t yet worked itself out. But in my view, it will start to become clearer over time.”
Listen to the full episode with Mr Ferrall here.
Basically it is a low touch model to end up in a balanced ETF fund & if you’re lucky, end up with some expensive Group Life Insurance. Yes, it’s better than nothing, but eventually more people will eventually wake up to how low-rent this solution really is. One thing is for sure, Jane Hume has zero idea about real financial advice.
Who is Jane Hume? (Marty McFly; June 2022)
Struggling to see why professional advisers need to be compelled to provide ‘cheap’ advice. No push for Lawyers/Accountants/Doctors to reduce their hourly rates.
Exactly. The powers that be wanted a profession, but not professional fees ??????
Vested interests and lazy politicians are pushing that technology will fix the affordability and accessibility of advice. It will not. The poorly designed regulations and hatred of advisers from the regulators needs to be properly addressed before wasting time on technology that will be as effective as a band aid on a gaping wound.
Come on dude. I got some really good advice from a 19 year old on Tik Tok yesterday.
WOW, spot on and excellent words ‘Anonymous’. One only has to look at what the life companies [i](in cahoots with regulators)[/i] have done to risk advisers to push them out of the industry – chop commissions to an unsustainable number and install a 2 year clawback on honestly earned remuneration. How long would the regulators or life company execs last if we [b]put a clawback on THEIR wages[/b] for inefficient or bad performance, not to mention [b]politicians[/b]. [b]This question NEEDS to be asked more and examined in PUBLIC!![/b]
The Insurers involved in Direct Sales are quite happy to use financial advisers. If the client changes their mind the Insurer claws back their costs of distribution. They cannot get a refund onm their own costs of distribution in the Direct Space… But they didnt think that far ahead to where adviser numbers would shrink to the point where this has become a material consideration.