Advice practices need to pay attention to next disrupters
Managed accounts, robo-advice, and scaled advice are going to be the norm in the next two to three years, Netwealth believes.
Presenting at Money Management’s Fintech, Platform and Wraps conference on Thursday, Netwealth head of managed accounts – strategy and development, Steve Thomas said advice businesses were not fully across technologies that were available.
Thomas said 29 per cent of advisers were using some level of scaled advice and 31 per cent expected to use it in 12 to 18 months.
“They recognise that scaled advice can certainly help in the ongoing management of their clients,” he said.
“The interesting part is for those 29 per cent using it, 40 per cent are using it for up to 75 per cent of clients. Those using it is really embedded in the biz models and not just something added on the outside.”
On managed accounts, Thomas said it was a rapidly growing area and that it was not just thought about as just an investment option anymore, but as a full backing solution that provided benefits to advice groups.
Thomas robo-investment was slow as there was no industry consensus on what robo was and the role it played. He said Netwealth believed that robo was there to augment and not replace advice by furthering client engagement between annual review processes.
“In 2022 might seem like a long way, but in reality it’s not. What stands out is that managed accounts, robo-advice and scaled advice are going to be the norm in two to three years,” he said.
“The question we have to advice businesses is ‘are they paying enough attention to other technologies that will be the next disrupters?’ – think artificial intelligence, blockchain, wearables for example – we’re trying to push advice groups to think long-term on what to do about their business and to keep abreast of the technology that is going to impact your business.
“The key question that comes down to this is ‘are we underestimating the impact of the rapid advancement of technology?’… advice businesses are currently not across technologies that are available.”
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
