Sadly, it appears that the vast majority of comments are from a developer’s or competitor’s perspective, with very few focusing on the customer.
My concern was heightened last year when one commentator, in reference to “robo-advice”, suggested that this “ridiculous innovation” be banned by ASIC for not being a service, arguing that its “one-size-fits-all approach” doesn’t represent the broader community.
I agree – one size doesn’t fit all. But I could use the same logic that most Australians do not fit the ‘ideal’ client definition of many planners – and that’s ok! Planners are running a business and need to build profitable and compelling value propositions, but who’s going to look after the consumers that don’t fit their profitable ideal client profile? This is where digital offerings add options and value.
Looking at the broader landscape, there are a number of hard trends that need to be seriously considered and applied. These are:
1. Consumers are making their own decisions and they will make the ultimate choice of who to deal with, when and how. People are no longer leaving that decision to others; if they want to go online at 10pm to get advice, they should be able to;
2. Technology continues to advance at an increasing rate, developing better solutions with a broader range and better quality. Technology continues to reshape consumer options for the better – why should advice be any different?
3. With superannuation’s legislated growth, people are accumulating more money, which we know leads to greater engagement.
We accept that people are better off when they seek advice, but still only 20 per cent of Australians do so. It’s up to us to find ways to appeal to the other 80 per cent. Maybe people don’t seek advice because they’re intimidated or embarrassed, some because they don’t trust easily, or simply because it’s just not convenient.
Whatever the reason, the financial advice profession needs to find new ways to connect, because everyone matters.
If we look at fintech and ‘robo-advice’ needs from a consumer perspective, I think you’ll see the need for solutions that don’t pass judgement and can be done in the safety of their own home. Our goal must be to find ways to help people engage so they become more competent, and in turn, confident. With greater confidence, we can nudge them to the next level of engagement, maybe even to comprehensive advice, but this needs to be done on their terms, not ours.
Realistically, the vast majority of people will not fully engage, but if technology provides information and insights to help them to be more confident, we should embrace it. The challenges facing many Australians with saving for their retirement are difficult enough without us restricting their engagement options.
Consumers deserve the right to engage in a way that they’re comfortable in doing, and if we can make it easier for them to gain competence and confidence, we’re changing lives for the better.
Duncan McPherson is the chief executive at Adviser Network. His career in financial planning spans over 20 years, and he was previously the head of the licensee productivity and development arm at MLC Advice Partnerships.
