The first major financial institution to take full advantage of the opportunities presented by scaled advice will change the market, according to Provisio Technologies chief executive Cameron O'Sullivan.
Scaled advice is currently being used by phone-based advisers for institutions as well as industry and corporate super funds, but it means many advisers aren't using it to its full potential, Mr O'Sullivan told InvestorDaily.
He said scaled advice will eventually be seen as just part of an adviser's arsenal and will be critical in servicing lower end clients who don't want to pay $3,500 for a statement of advice.
Once Future of Financial Advice has bedded in, advisers will need to be able to demonstrate their value in a way they haven't had to before, he added.
"If a client is paying $500 per year, advisers will now have to build an ongoing proposition that allows the adviser to make money on that $500 but that also has value for the client for them to want to continue the relationship," he said.
"None of the traditional advice models with face-to-face advice will achieve that; advisers will need something web-based or backed by a call centre, something to allow them to deliver that far more cheaply."
Scaled advice technology could also help advisers drive into the self-managed super fund (SMSF) space, which is an area some advisers have struggled with, particularly in cases where a client wants to retain control of their investments, which is where an adviser historically makes their money, Mr O'Sullivan said.
Institutions can use this as an opportunity to help advisers who want it as a solution to 120-page statements of advice, he said.
"[Institutions] are looking at scaled advice as a direct to public model but the first institution to build this with the adviser in mind will change the market - this is a solution to what they've been crying out for," he said.
