In its latest Trialogue article, Tria said a “meaningful proportion” of advice issues for Australians who either cannot afford or are unwilling to pay for advice can be solved via automated services.
The industry consultant said that while financial software providers, such as XPlan and Midwinter, have been focusing on providing innovative solutions which aim to reduce adviser cost-to-serve with the goals of reducing the price of personal holistic advice for consumers, these fintech providers rely solely on advisers’ abilities to adopt the technology into their businesses.
Only 30 per cent of non-salaried advisers would consider using digital advice as part of their business, and of that only a third would use it to service clients with lower balances or less complex needs,” Tria said.
“There doesn’t appear nearly enough interest at present to materially diminish Australia’s advice gap.”
“If working through advisers to solve Australia’s advice gap is not the answer – at least until early adopters commit to technology-enabled business models that focus on this segment – who can stand in while we wait?” Tria said.
Major banks have both the scale and relationships to tap into innovative financial planning software development, and the distribution network to reach a substantial proportion of Australians in the advice gap, the firm argued.
However, intense regulatory scrutiny and poor public image “may well continue to distract from efforts to crack this space,” Tria said.
“But given enough time, for those that partner well with the technological forefront in algorithmic advice, it could well be them.”
