Scaled advice will not undermine but boost planning

Scaled advice will not disrupt the current financial planning model, with the rise of online and commoditised advice likely to expose more people to financial planning rather than shift them away from it. 

Provisio chief executive Cameron O’Sullivan said scaled advice had been portrayed as detrimental to planners, with even institutional planning groups regarding it as a challenge to their dealer group channels. 

“I have not seen the view that scaled advice is actually complementary to the existing advice model because the current model holds that every piece of advice must go through a full advice process,” O’Sullivan said. 

“It is the way the profession has always done its work, with many still seeing scaled advice as poor advice and a dirty word.” 

O’Sullivan’s comments are counter to those of Stockspot founder Chris Brycki, who believes that entry-level advice aimed at low-balance clients will move online and become commoditised.

O’Sullivan said that most planners could easily adopt scaled advice into their business - and many were already doing it as part of their client reviews but not seeing it as such. 

“Initial advice often needs to be a full plan but follow-up advice fits into the scaled advice model, which is not just low-end advice,” O’Sullivan said. 

“The problem for some is the term 'scaled advice’, which may be better referred to as 'rapid advice’ and which covers reviews, updates and tweaks to a financial plan which planners already do for clients.” 

O’Sullivan said recent shifts in advice had led to the development of three tiers - online, scaled advice and face-to-face advice - with consumers unlikely to use just one over the course of their lives. 

He said this mirrored the service model of retail banks and that planners would need to have the same levels of integration between the three tiers that people have come to expect of their banking providers. 

“Clients will access advice in different ways but will expect that by the time they speak face to face with an adviser they will have all the information provided to the other tiers. 

“In this way consumers could get all the benefits of full financial advice via a scaled and online model, with the difference that the advice has been delivered in parts according to the needs of the client.”