tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, July 10th, 9:59PM

News

rss
Latest Headlines

Here's how to get set for robo

Advisers who want to build a broader client base could look at the roboadvice technology that is proving popular overseas and try to buy the license rights in New Zealand.

Tuesday, May 2nd 2017, 6:00AM

by Susan Edmunds

The rewrite of the laws governing financial advice in New Zealand clear the way for automated personalised advice for the first time.

Law firm Minter Ellison Rudd Watts made a submission on the Financial Advisers Act review’s options paper, in which it said automated online platforms were the best way to provide personalised financial advice to millennial professionals.  It polled some of its new graduates for their opinions, as representatives of young advice consumers.

It said the current FAA regime had failed to capture the needs of a generation of consumers who relied on technology for their everyday decision making.  “In a generation where people use social media apps to find their life partner, they told us it was unlikely they would sit down with an AFA to make financial decisions.”

Lloyd Kavanagh, MinterEllisonRuddWatts chairman and partner, said the firm was advising some start-ups that were getting ready to provide some level of automated advice once the regime changed.

He said it was not likely there would suddenly be an influx of roboadvice offerings. But over time, as technology became smarter and artificial intelligence enabled platforms to learn from what people did, financial advice would be like any other field that saw an increase in automated providers.

“A lot of New Zealanders would dearly love to have personalised financial advice,” he said. "But people like the millennials we surveyed, they don’t have a lot of cash now. Their biggest asset is time. It’s hard for them to find personalised advice unless it’s from a product provider and they’re honouring their obligations but they are keen to promote the product their institution puts forward.”

He said the change to more automated advice would not happen overnight but the impact would be much greater than the industry expected.

“People who think the world will remain as it is today and never change don’t have their eyes open.”

The first robo services would likely to be those that helped people find the right KiwiSaver provider and fund, he said.

That would then extend to other types of managed investment schemes before other services helped answer the kind of questions that were sometimes submitted to blogs and radio shows, he said. Thing such as should I pay down my student loan or put more money into KiwiSaver.

Advisers should look at their business models, look around the world and see what was happening and think about what their clients would want, he said. Those with a client base of people in their 50s and 60s might not see much change for 10 years or more. 

“If they are looking to grow a broader client base of people in their 20s and 30s, I’d be looking offshore, particularly to the US, to see what technology is there, can they get a licence for the right to operate in New Zealand? Then they’ll be running a business that’s following the millennial generation as it passes through the life stages.”

But he said rather than being worried about the advent of roboadvice, advisers should think about how they could use it to benefit them. If they wanted to give personalised advice, they would need to think about how to build a client base that would continue to value that.

Kavanagh said clear terms of licensing, appropriate disclosure to clients and a code of conduct adapted to automated advice were needed as part of the new regime. He said there would also need to be suitable governance arrangements for the companies overseeing the roboadvice. The FMA would need to be able to monitor its algorithm.

READ MORE: Start-up drops out of fintech accelerator

Tags: roboadvice

« Getting to Know: Mark WeaverLVR restrictions to be reviewed »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • Harking back to the old days
    “Tactical move by CIGNA and looks like they have a lot of bench strength now in sales, underwriting and product / pricing...”
    12 hours ago by hitting rock
  • Greens want ACC extended to cover sickness
    “Never happen. The Greens are such an aspirational bunch. Must all the weed. They 'want' all sorts of unlikely things...”
    15 hours ago by All hat no cattle
  • Harking back to the old days
    “Really positive news. NZ has been blessed by many successful leaders and it is good that their skills can skill be utilised...”
    21 hours ago by Francis L
  • Harking back to the old days
    “I dare say Cigna just got that extra grunt it's been looking for....”
    22 hours ago by Matron
  • Greens want ACC extended to cover sickness
    “The Greens have no idea The purpose of the Woodhouse report was to remove the "at fault" component of accidents Sickness...”
    2 days ago by LNF
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 3.19 3.19 3.49
AIA Special - 2.69 2.69 2.99
ANZ 4.44 3.15 3.25 ▼3.39
ANZ Special - ▼2.55 ▼2.69 ▼2.79
ASB Bank 4.45 3.19 3.19 3.49
ASB Bank Special - 2.69 2.69 2.99
Bluestone 4.44 4.44 4.44 4.44
BNZ - Classic - 2.65 2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.25 3.29 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union South 5.65 4.75 4.75 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.60 2.65 2.80
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 3.99 2.58 2.68 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.40 3.54 4.00
Kiwibank - Capped - - - -
Kiwibank - Offset - - - -
Kiwibank Special 3.40 2.65 2.79 3.25
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.49 3.45 3.39 3.69
SBS Bank 4.54 3.29 3.19 3.49
SBS Bank Special - 2.79 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 ▼2.69 ▼2.75 ▼2.99
The Co-operative Bank - Standard 4.40 ▼3.19 ▼3.25 ▼3.49
TSB Bank 5.34 ▼3.35 3.49 3.79
TSB Special 4.54 ▼2.55 2.69 2.99
Wairarapa Building Society 4.99 3.75 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.55 2.69 2.79
Median 4.55 3.19 3.22 3.39

Last updated: 10 July 2020 9:02am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com