Web no threat to planners: Power
Financial planners should not fear e-commerce, but use the opportu-nity to concentrate on their core business of advising, according to BT executive vice president Terry Power.
Financial planners should not fear e-commerce, but use the opportu-nity to concentrate on their core business of advising, according to BT executive vice president Terry Power.
Speaking at the Victorian FPA state conference last week, Power said technology would create a new type of investor who would need advice as they accumulated assets.
He sees this investor going to an adviser as a "sort of diagnostic check".
"They will force advisers to concentrate on their core business, fi-nancial advising, by highlighting the difference between what I term the advice and non-advice channels," he says.
There will always be people who never use advisers, Power says. In the US, this peaked at about 35 per cent of all investors.
"But that has dropped to about 30 per cent as investors accumulate significant assets and realise they need advice," he says.
"I don't believe the same percentages will be achieved in Australia due to the complexity of our superannuation legislation. However, the non-advice channel is a growth channel and will not be ignored by fund managers and product providers."
Power believes advisers should not waste their time with investors who want to run their own portfolios and should be chasing those who do need financial advice.
He expressed surprise that advisers had not pursued superannuation fund members as a source of new business. Providing financial advice to a fund, and therefore its members, was a way of locking into the client and providing another source of income.
While BT will continue to use advisers to distribute product, Power warns if competitors started using e-commerce to reach this target audience, BT will have to follow suit.
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