Financial advisers will be significantly redefined by technology in the next decade, and must acknowledge the "new way to play" in the new market dynamic, Rubik Financial managing director, wealth Wayne Wilson said.
"This has been a decade all about regulation and austerity so far, while technology's gotten a lot smarter and accessible and it is going to change the way we think about how planners perform their roles going forward," Wilson told delegates at the 12th Annual Wraps, Platforms and Masterfunds Conference last week.
"With margins heading towards 150 basis points, all of us have to think of ways to reduce our costs to maintain profits."
He said advisers who clung solely to their current financial advice model are putting themselves at risk, as they will be redefined by technology and the margins they target.
In the future, advisers will look towards technology to reduce their costs and to target new markets, Wilson, who was the former head of Asgard Wealth Solutions, said.
"The problem for all [platform and technology providers] is that their appetite for new technology is going to be really hard to satisfy and it's growing stronger by the minute," he said.
"We all need to take stock around the global financial crisis and the Future of Financial Advice [reforms] but in particular the march of technology and the impact of those two things on consumers in the last five years is what's going to impact most on us. If we don't recalibrate our businesses for the future, you'll be passed by a new dynamic."
Platforms will remain a logical investment tool for consumers with $ 0.5 - 1 million to invest.
But in order to remain attractive investment options, platforms need a low-cost alternative that competes with industry funds and offer a sophisticated investor component to appeal to clients with complex needs, Wilson said.
Advisers will need to change to meet demographic demands by determining what communication strategies are required for each segment and what advice or services will be offered.
In addition, they will need to think about the technology use and communication preferences of each demographic, Wilson said.
"Text, voice, blogs across smartphones, tablets and computers will become part of every day [interaction] for intermediaries going forward, and while they're doing that, they're going to have to change their service offerings," he said.
"The face-to-face approach of traditional financial planning is going to need to expand to include electronic visual connection, multiple conferencing online and the use of blogs for real-time communication."
He said advisers choosing not to acknowledge the next competitive environment risk being left behind, as there will be places to compete and succeed if it is embraced now.
Wilson was appointed to lead the Coin financial planning software business in August, after Rubik finalised its purchase of the business from the Macquarie Group.
