Adviser Ratings wealth chief executive Mark Hoven said the fact that only 14 per cent of Australians receive advice despite the large majority needing assistance with their finances demonstrates a huge unmet opportunity.
“There’s no question that the traditional financial advice industry today has an image problem, compounded by the findings from the royal commission,” Mr Hoven said.
“We believe the digital financial planning world can start to bridge this gap and have launched a review register of 36 robo-advisers to provide consumers more transparency about this emerging world of finance solutions.”
While Mr Hoven acknowledges that robo-advisers have often been presented as a disruptor to the traditional advice industry, he said a hybrid model of interdependency is a more realistic scenario.
“Digital advice solutions present benefits for traditional financial advisers if sympathetically incorporated into their business design,” he said.
“They can improve cost of new customer acquisition, reach new types of customers, broaden service offerings, transition certain service components online, bring advisers closer to the customer, and lower the overall operating cost of the business.”
Further, Mr Hoven believed that while the advice industry has purposely focused on more affluent customers, equally there are a raft of reasons why consumers have avoided the industry, including concerns about trust, affordability, fears of being judged or embarrassed, and a lack of solutions offered for simple advice needs.
“Because these digital tools are breaking down holistic advice into its component parts and delivered through the streamlined anonymity of an online world, they are helping to overcome previous advice roadblocks and providing accessibility to professional financial help for more Australians,” Mr Hoven said.
I don’t understand . We have to do a fact find , produce a 43 Page SOA , explain exactly what the client can understand and what they don’t , fill out risk profiles to see if the client understands the risk they want 9 total work 5 hours then cost of paraplanning $600, your advice at $150 hour , appointments at he office etc.. Robo Advice , fill in the gaps , get a faceless printout and if you lose money , Sue the computer with no PI insurance ?? Cost $50 all care , no reponsibility . The reason many people don’t see advisers is it costs too much due to Government red tape !!!
It doesn’t exactly work like that. Robo/Digi Advice have the same responsibilities and obligations as all representatives of it’s licensee. I agree with Mr Hoven’s sentiment around robo advice catalysing sufficient interest for clients to eventually seek comprehensive advice down the track. Advisers may not see it right now, but it is more a benefit than a threat.
The interesting part for me is the level of protection for the client and the adviser in terms of PI cover. Changes in circumstances need to be inputted into the system so possibly this could still work as a strategy not related to the advice model as that should be covered by the Robo itself.
Will the register include photos?