New York-based fintech firm Pefin said its platform uses AI technology to provide holistic, affordable and fiduciary financial planning and advice, encompassing every financial decision a consumer would need to take, all for 5 per cent of the cost of a human adviser.
It said it is currently setting up an Australian subsidiary to customise the product for the Australian market.
“Pefin will license its AI technology and create a uniquely customised Australian platform that provides fiduciary level and holistic financial advice to clients,” Pefin said.
“[The] goal will be to serve the 95 per cent of Australian consumers for whom the cost of human financial advisers is prohibitive, and who would like to receive the highest quality fiduciary advice.”
Pefin president Viju Joseph and Pefin Australia chief executive Anthony Caneva will attend meetings in Sydney and Melbourne from 8 to 18 October to seek partners and investors.
Further, Mr Joseph and Mr Caneva will plan to meet with regulators “to explain how its AI can provide and ensure fiduciary standards for consumers”, as well as to “create a level of transparency for the benefit of regulators that is not possible with human advisers”.
Apparently Amazon was using an AI algorithm to scan thousands of CVs when recruiting new staff.
They gave up when they found it was discriminating against women over men.
The Amazon execs gave up.
Money management is one of the most politically sensitive matters, whether in families, society, etc.
Can’t wait to see how these impartial algos will just nail it eh?
To provide compliant advice in Australia it needs to be provided via a SOA. This has already been automated, so if they are looking at that market good luck. I use personal planning software for all my clients already. There is nothing this new pefin can offer that my clients that would take them away from me.
Who do I sue if the advice is bad, a computer?
Human advisers could provide advice for a fraction of current costs if they didn’t have to comply with current laws.
Why is it that “fintechs” and accountants and real estate agents and book authors are allowed to give financial advice without any need to comply with the law? Yet licensed advisers have to comply with a huge amount of draconian and bureaucratic regulation.
Because for 20 years salespeople did a 4 day course and came out the back of it as Financial Planners, these sales tactics resulted in plenty of horrid outcomes for retail clients, and many good outcomes as well. As a result, we need to make sure those advisers exit stage left, and those that are happy to go the extra mile for their clients and abide by legislation remain.
Waits to read that they decided it was financialy imposible to implement due to red tape and regulations.
This is a good idea and the way forward for a large percentage of people that need financial advice. A lot of advice can be covered in a more vanilla way, using models and algorithms. A good financial adviser is worth the money with more complex financial situations. A lot charge big money for very basic advice.
To properly customise it for Australian conditions he will have to introduce the ability to charge dead people and to completely ignore the best interest of the client.
and to slip a few bucks to ASIC and the FPA to avoid penalties.