Platforms failing to put customers first
Platforms were developed to benefit advisers rather than their clients, and it is time the industry started questioning their utility, says Pinnacle Practice director Anne Fuchs.
Reflecting on her time working for BT in the late 1990s, Fuchs said platforms were developed to drive efficiencies in advisers' businesses.
"[It was] an opportunity for advisers to put up their fees in the context of [Financial Services Reform Act]," she said.
But most consumers are not interested in putting their money in managed funds, Fuchs said. When Australians envisage their retirement they think about property, cash, direct shares and a holiday home, she said.
"We don't really have any solution that taps into the emotional aspect of what the average Aussie likes investing in. [Instead], we've developed a solution that's focused on what we want them to invest in.
"The consumer's not at the core of it. And this is the reason why [our industry] continues to fail to grow and why we have to cannibalise each other and write cheques out to steal each others' advisers," Fuchs said.
As it currently stands, only two out of 10 people seek advice, she said.
"But if we actually innovated and developed customer-centric solutions … that pie would increase from two out of 10 to five out of 10, and then we would all win," Fuchs said.
The financial services industry is full of "really smart people" who have the ability to innovate, but the desire is not there, she said.
Advisers would be grateful for more customer-centric solutions, because they are the ones who are at the "coalface" dealing with angry clients who are questioning the value of platforms, Fuchs said.
"In this great land-grab, who owns the land? The customer owns the land, not us. Cost matters, and if we're making all this profit, shouldn't we be handing it back to them and delivering them a better outcome?" Fuchs asked.
Recommended for you
While model figures provide valuable insights on how advisers can draw benefits from managed accounts, Zenith’s head of portfolio solutions has argued that professional judgement and quality research are key to successful implementation.
While the number of financial services staff using AI has almost doubled in the last year, two surveys have revealed that fast-paced AI adoption has led to governance gaps and growing concerns about job security.
Entireti has partnered with Striver to connect graduates and job seekers with its advice network to support the placement of new talent.
ASIC has cancelled the Australian financial services licence of Ivy League Capital Pty Ltd, a firm authorised to provide advice in relation to managed investment schemes.
