Digital vs human advice: how to balance a hybrid model
According to this financial planning software CEO, digital innovation in the adviser landscape is crucial for greater efficiency and to reach younger clients.
Advice Intelligence CEO, Jacqui Henderson, identified the ways advisers could implement a hybrid model of both digital and human financial advice.
In discussion with the Association of Financial Advisers (AFA), Henderson stated that digital platforms “act as a conduit between the adviser and how consumers manage their lives”.
The discussion surrounding digitised advice had been met with both apprehension and eagerness.
Despite industry figures who argued against the limited capabilities of digital advice platforms, Michelle Levy previously noted the importance of technology-enhanced advice with the number of Australian advisers continuing to drop.
Henderson identified that emerging groups of affluent individuals, aged 27-34 years earning $300,000 per annum on average, had a 71% propensity to seek financial advice. She recognised that younger Australians would see higher technology adoption through apps and digital platforms.
Compared to static methods such as paper and PDFs, the automation of advice processes would enable clients to receive a financial plan in a matter of hours.
“Digital advice saves advisers time and cost for Statements of Advice (SOA) production and compliance,” Henderson explained.
According to Advice Intelligence, 24% of consumers did not read their SOA document, coupled with 45% of clients who expressed a need to be more involved in the planning process.
The CEO highlighted that moving away from static models of advice and towards digital interactivity through simplified apps would allow clients to have a greater role in the process.
Henderson identified five steps advisers could take towards a digital hybrid model:
- Centralise client data;
- Provide digital client-facing advice tools to enable greater collaboration;
- Automate compliance obligations, such as the production of instant digital SOAs with digital sign-offs;
- Use an integrated application programming interface (API) alongside live data feeds; and
- Track client progress and ongoing services.
Despite the benefits of automated advice, she reiterated the vital role that human advisers play: “Having advisers is fundamental and will always be a part of this hybrid model.”
“Every time a client goes through a digital journey, they need to know that there’s another human on the other end, because humans need another human to validate their thinking.”
AUTHOR
Jasmine Siljic
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.
