Six Park reveals degree of push behind expansion of scaled advice
Today’s digital advice client could be tomorrow’s wholesale investor and advisers need to drop the belief that solutions like robo advice are competing with traditional financial advisers.
That is the bottom line of a new white paper released by digital advice firm, Six Park with its chief executive, Pat Garrett, suggesting the financial planning industry needs to accept that many clients don’t want to pay large amounts for financial advice and adapt to the reality.
Six Park has chosen to release the white paper in the wake of the Financial Services Council’s (FSC) Advice Summit and amid confirmation by the Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume, that the Government has been pressing the Australian Securities and Investments Commission (ASIC) to pursue avenues to make advice more affordable.
It has also come as ASIC has confirmed it is looking to consult with the aim of removing impediments to the better delivery of scaled advice.
Six Park pointed out that the white paper had received contributions from Financial Planning Association (FPA) head of Research, Ben Marshan, Netwealth chief executive, Matt Heine and Investment Trends Research director, Recep Peker.
“The increase in the number of Australians needing financial guidance, the rise in millennial and female investors and the immense generational wealth transfer we’re about to see means the nature and needs of the broad consumer market are becoming much more diverse. This is the opportunity for those advisers ready for this transformation,” Garrett said.
“Many of these Australians don’t have huge budgets for advice, they have no desire for full-scale service, and they don’t want to engage with advisers in the same way their parents did – so ‘best fit’ advice is not what it used to be.
“Anything that allows advisers to better engage with these Australians today is a very attractive proposition and that’s where digital solutions come in. Today’s digital advice client could be tomorrow’s wholesale investor.”
Six Park is arguing that a number of myths and perceived red tape have hindered some in the industry from embracing digital, scaled advice including the misguided belief that it was not compliant with best interests and that ASIC did not approve of it.
Garrett pointed to the FSC’s report and the reality that the Government and ASIC were keen to give scaled advice a more prominent role.
“Scaled advice services already have regulatory guidelines supported by ASIC and the federal government, and the good news is that scaled advice is working right now. There is no need for advisers to wait for the kinds of changes the FSC is advocating to take a step towards the future of advice.”
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