There are no longer enough advisers to meet anticipated demand in Australia post-COVID-19, but consumers aren’t willing to pay the large sums associated with comprehensive advice – meaning advisers need to look to digital solutions to round out their offering.
“Many of these Australians don’t have huge budgets for advice, they have no desire for full-scale service, and they don’t want to engage with advisers in the same way their parents did – so ‘best fit’ advice is not what it used to be,” said Six Park co-chief executive Pat Garrett.
“Anything that allows advisers to better engage with these Australians today is a very attractive proposition and that’s where digital solutions come in. Today’s digital advice client could be tomorrow’s wholesale investor.”
But Six Park believes a number of “myths” around robo-advice – that it is not compliant with BID, that ASIC does not approve of it, and that it competes with traditional advice – are preventing advisers from integrating this digital solution into their practice.
“There is no competition there – in fact, when a human element is added to a service like robo- or digital-advice, the conversion rate of customers who actually implement the advice drastically increases,” Mr Garrett said.
“It’s both an exciting and challenging time for the industry. There is a lot for advisers to work through – there is no denying that – but there is certainly no red tape that’s blocking their way and some aspects of going digital could actually be much easier than first perceived.”
He also noted that regulators were supportive of scaled advice, recognising the importance of meeting different consumer needs.
“Their response has been to reiterate that scaled and digital advice should play a prominent role in providing services for the simpler needs of the mass market,” Mr Garrett said.
“Scaled advice services already have regulatory guidelines supported by ASIC and the federal government, and the good news is that scaled advice is working right now.”