Advice under threat from 'Google effect'
The deluge of general information available online poses an existential threat to the financial advice profession, according to Netwealth executive director Matt Heine.
Speaking at the AFA national roadshow event in Sydney on Wednesday, the financial services exec and self-described “techo” said that while he is “250 per cent pro-advice” and supports the future growth of the sector, a number of serious challenges can be gleaned from global trends.
“There is such a vast quantity of information available online that people are struggling to wade through it all to work out what is wrong and right,” Mr Heine said.
“At the same time, fewer are willing to seek out professionals who provide specialised information,” he added, describing this trend as the “Google effect”.
Mr Heine said an analogous example is the health sector, where visitations with professionals have dropped off since online medical self-diagnosis became common.
In addition, Mr Heine pointed to developments in the US and UK and an Oxford University report which suggested “financial advice is among the 10 professions most likely to be computerised” in the future, anticipating that “commoditised advice is likely to be replaced by robots”.
However, he added that it is “not all doom and gloom”, with some technological advances – such as the rise of online adviser ratings websites akin to TripAdvisor – likely to assist leading advice businesses, and some aspects of the advice profession likely to endure.
“The only real sustainable advantage is understanding your clients,” Mr Heine said. “You need to be client-obsessed in the age of customers.”
AFA Adviser of the Year and JBS Financial Strategists director Jenny Brown told the same audience that while it is conceivable that the “basics will be replaced” by automated technology, the advice profession will survive.
“You can’t replace a relationship with a robot,” Ms Brown said.
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