Scaled advice needs a rethink
Financial advisers need to view scaled advice as an ongoing opportunity rather than a threat to their business model, according to Provisio Technologies director Cameron O'Sullivan.
He said he is frustrated that some advisers view scaled advice as a "bad thing" because it has effectively allowed for new competitors to enter the market, albeit at the lower end of the client demographic.
"The reality is most of these new players are competing in a space that advisers shouldn't be in anyway," he said.
With a number of advisers adding phone and online solutions to their service capabilities, they can potentially tap into a new demographic of clients that they would have had no way of servicing competitively using existing processes, according to O'Sullivan.
Although independent planning practices may not have enough 'C' and 'D' clients to warrant establishing an internal phone-based advice service, O'Sullivan said institutionally aligned businesses will benefit the most from scaled advice, referring to the Commonwealth Bank phone and video-based advice service Advice Essentials.
Some advisers and institutions need to understand that scaled advice does not necessarily mean the adviser is removed from the advice process, he said.
"The reality is even so-called 'comprehensive' advice is often just a combination of a scaled advice transaction, whether that's a superannuation rollover, transition to retirement or an insurance review," he said.
"While it may have been a comprehensive plan you've done initially, after that it tends to be more scaled transactions," O'Sullivan said.
He added that advisers have the opportunity to reap more of the benefits of scaled advice than the already well-established intra-fund capabilities of industry super funds, which are often built around "point-in-time" transactions rather than the ongoing proposition that an adviser can bring to the consultation process.
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Staff Writer
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