There is no automated system that is able to "effectively" steer people from bad decisions, so quality financial advice still requires the hand of an adviser, argues industry consultant Jim Stackpool.
The founder of Strategic Consulting and Training said the robo-advice tools of today lack the ability to replicate the work of most financial advisers, Mr Stackpool said.
While the benefits of quality advice are tangible, he explained, there is more to managing financial affairs than many robo-advice companies let on.
"Advice can be described as an invisible hand that guides people or holds them accountable for their financial decisions, steers them away from bad decisions and if necessary, jolts them out of inaction," Mr Stackpool said.
"The invisible hand of professional advice works only for the best interests of the client and not the interests of those providing the facts, trends, analysis and recommendations.
"At the moment, I don't believe an automated 'advice' service can effectively do that," he said.
Mr Stackpool said there is no question that some of the new online wealth solutions can deliver "enormous" consumer benefits; however, those tools would be more useful in the hands of advisers.
"Advisers can and will use them, in conjunction with strategic advice, as tools to help them engage and educate clients. They could allow advisers to help more people, regardless of their financial stage in life," he said.
Despite this, Mr Stackpool said the idea that financial advisers are the necessary middle-people who sit between clients and wealth solutions has started to lose currency.
"From inception, the financial services industry has told consumers they don't have the skill or ability to manage their own affairs so there's no use trying. Some financial planners became gatekeepers to wealth solutions, forcing consumers to go through them," Mr Stackpool said.
"Thankfully, that self-interested Berlin Wall is slowly crumbling, as it should. In the process, the gatekeeper's nakedness is at last being exposed. Technology is shaking up the industry from its complacency, challenging the status quo and I say, 'Bring it on'."
ASIC has banned a former adviser based in Sydney from providing financial servic...
The FPA has urged the repeal of the best interests duty safe harbour provisions ...
An industry body has called for immediate action to amend the FASEA code of ethi...