Can a robot deliver financial advice?

Brian Boggs, co-founder, Leading Minds AcademyNow that we have been living the dream post-FOFA for three whole months, what has changed at the coal face? Has strategy replaced product placement?

 

Brian Boggs, co-founder, Leading Minds AcademyNow that we have been living the dream post-FOFA for three whole months, what has changed at the coal face? Has strategy replaced product placement?

 

Advice and strategy are solutions that successful advisers implement. They understand that to charge a fee every year the service has to be understood and appreciated. These advisers do not struggle with a value proposition, their whole business is driven by strategy and advice.

The uber successful advisers have taken commission from product off the table completely.

Now that we have been living the dream post FOFA  for three whole months what has changed at the coal face? Has strategy replaced product placement?

Not from my observation and certainly not in the vertical integrated models, KPIs, and bonuses, paid to the grey collar workers are all based on product placement (read sales, but that’s not what they call it). Who are these people that receive these bonuses- the advisers that provide the advice?

Frayed knot, that slice of the pie is shared by everyone else in the organisation, once the product has been recommended (sold).

So I can well imagine that these people do not want the rivers of gold to dry up. How indeed does one clip the ticket on strategy?

Yet we are now in a post FOFA world of looking after the clients best interest. "Damn" -I can hear the cursing  in the ivory towers- "I need that bonus to buy the boat, trip, fur coat…”

Maybe we can get a robot to churn out advice, it can’t be that hard, pre programme some simple scenarios and out pops product solutions, no adviser needs to be involved and more bonus shared by the cardigan brigade, that have and will never have seen a real live client.

While we wait for the new Government to comment on issues such as grandfathering and vertical integration, (yes folks, the bonuses compound all the way to the top, just like a pyramid scheme only better).

We can consider if the system is broken or fixed. Would advisers and their clients be better served by advice independent of a product manufacture? This surely would be a financial reform and one worthy of this government. Perhaps they will consider that scaled advice while important for clients that require event rather than project management, is best described for what it is, a product solution, now this may not be in the clients best interests but hey- there are tickets to be clipped so stand back.

 

Advice firms that structure around advice and strategy will be valuable assets in the future. This advice model will be sold on a multiple of EBIT, I pause to consider on what basis will all the other advice business be valued?

Get with the programme, see into the future and change to become a specialist that sells advice.


About Brian Boggs
Brian Boggs, co-founder, Leading Minds Academy

Brian Boggs is the principal of Adviser Asset Solutions, co-founder of Leading Minds Academy and principal of Information, Learning And Implementation, providing consulting services to financial product manufacturers, licensees and financial advisers. 

He is a stalwart of the financial planning industry with over 32 years’ experience. Under his leadership, Wise Financial Services Pty Ltd became a national award-winning financial services company, managing client’s accounts worth millions of dollars.

Specialising in helping advisers grow their business, Boggs is a sought-after public speaker, regularly appearing at industry conferences and PD days.

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