Banks will undoubtedly return to advice, says professional

Speaking at the Stockbrokers and Investment Advisers Association (SIAA) annual conference in Melbourne, Betashares chief executive Alex Vynokur said: “Banks will, in my view, no doubt be back in the game but in a different way.”

The possible return of banks to advice has been a hot topic of discussion since Michelle Levy presented her final Quality of Advice Review (QAR) report which recommended banks, alongside their institutional peers such as superannuation funds and insurers, should increase their role in advice.

Although seemingly opposed to the idea at first, Financial Services Minister Stephen Jones heeded the recommendation and announced that banks should be allowed back in to ease consumer access to low-cost advice.

Addressing the matter on Tuesday, Vynokur said: “In [the] last 14 years, banks have moved out of the wealth segment either by choice or through regulatory intervention.

“At the same time, the needs of Australians have not gone away and are becoming more acute.

“Millions of Australians turn to banks for their daily needs in terms of credit cards and mortgages. I do not believe they will come back with human advice but I do see a day when they will use a digital service to help customers be smarter with their money.”

Vynokur also predicted that the same technology that he believes will be used by the banks could help advisers offer more advice to more people.

“Technology will play a much more significant role in the advice industry, not only in how humans deliver advice but enabling advisers to augment their client base and provide a high-touch service for those who can afford to pay for it. But at the same time, it will allow them to look after clients who may not be able to pay for it,” he said.

“There is no question in Australia that technology will be helping advisers more and more to deliver cost-effective advice to Australians.”

He, however, maintained that human advice is not going away.

“Personal, human advice is not going to go away and the need for human advice is greater than ever as the flow of information we are receiving will require trusted relationships,” Vynokur said.

The role that technology will play in advice was recently acknowledged by the Financial Services Council (FSC), with the launch of the Digital Advice Expert Group to improve access to affordable and accessible advice.

“Digital advice offers new and exciting ways for consumers to access high-quality, affordable financial advice,” said FSC chief executive Blake Briggs.

“The massive opportunity to deliver financial advice digitally is confronted by common challenges posed by a costly and burdensome regulatory framework.”

Briggs also shared independent research which showed that almost 4 million Australians would be open to low-cost digital advice solutions.