Speaking at Sterling Publishing’s Adviser Innovation event in Sydney last week, netwealth joint managing director Matt Heine discussed the importance of embracing disruption and adopting innovation.

Referring to a study by Oxford University, Mr Heine suggested there is a 58 per cent chance that financial advice will be replaced by robo-advice or artificial intelligence in the next 10 years.

However, what was once dismissed by the industry is beginning to be seen as an opportunity. 

“Advisers’ minds have shifted largely and what was seen as a threat 18 months ago, many are now looking at how they can build it into their service package,” Mr Heine said.

“The reality is that if we don’t innovate, we are going to die as an industry.” 

Mr Heine pointed to 10 key aspects of innovation – profit model, network, structure, process, product performance, product system, service, channel, brand and customer engagement.

Speaking on structure, Mr Heine asked: “How can you structure your business to actually provide time to work on your business and not in your business?”

“One of the hardest things about innovation is to actually sit back and think about [it].” 

Mr Heine also suggested that advisers need to think about their product system and how to “wrap services” around a client so that they remain within the business.

He concluded that innovation creates businesses that are built for tomorrow – pertinent for an industry that is increasingly challenged by both technology and regulation.

“Innovation doesn’t have to be big; it can be small incremental changes.” 

Michael Heine, netwealth’s additional managing director, reiterated the importance of innovation for financial advice.

“Businesses that innovate create more efficient work processes and have better productivity and performance,” he said.