by Daniel Smith
As part of a consultation into affordable financial advice, the Australian Securities and Investments Commission (ASIC) told a select committee that “There is very little appetite for digital advice among existing advisers.”
ASIC reached this perspective on the market after going through 469 submissions from advisers, licensees and other industry stakeholders.
In answering ASIC’s questions, advisers cited development costs, lack of demand and consumer preference as reasons for avoiding digital advice.
“Most considered that digital advice is only suited to simple advice needs and younger people,” ASIC stated.
“Respondents also noted that existing technologies often ‘promise a lot’ but in practice do not integrate data well … and do not allow for adequately tailored advice and strategies.”
Do New Zealand advisers take the same view?
Katrina Shanks, CEO of Financial Advice NZ says that “NZ advisers understand that there is a progression in the way clients are seeking advice.
“While some of that can occur digitally, I think advisers know from interactions with their clients that nothing beats a face to face relationship.”
Shanks does, however, believe that there are “many stages in the advice process that can be done digitally”.
“Humans are looking for different solutions. A digital platform is one of those solutions. It is a balance between the consumer having access to the information and knowledge they require to make informed decisions.
“But for many financial advice is not just about product placement, it is about giving advice, setting goals, and providing solutions to help the lives of individuals. It is a lot bigger than the product placement of most forms of digital advice,” Shanks adds.
John Bolton, founder of Squirrel, says that there is an appetite for digital advice in New Zealand and many people are already on board.
“Is there an opportunity for digital tools to help people? Absolutely. It all just depends on what people want to [do].”
Bolton, like Shanks, believes that a rise in digital advice technologies will not be the end of the human adviser.
“I think digital advice needs to be augmented with a human adviser.
“This purist view that you are either working human or digital seems wrong to me. It’s not one or the other, you have both working together.”
The appeal of digital advice for both the adviser and the customer is something that the New Zealand market will see more of in coming years, says Bolton.
“I think digital and augmented advice is the future. Advisers are going to find more and more of their systems and processes will become digital.”
“Fundamentally it is about reducing the costs observed. Digital can make advice more accessible, and a lower cost to serve.
“Ultimately if you can reduce the amount of time [required], then that benefits everyone.”
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