Digital advice key to getting financial institutions back into financial planning
The use of digital advice in the context of the Quality of Advice Review (QAR) will allow financial institutions to return to advice, and super funds to expand advice delivery, according to digital advice specialist, Ignition Advice.
Responding to the QAR proposals, Ignition Advice claimed that digital advice was the “glue” which would hold together the “good advice” concept which had been proffered by the chair of the QAR, Michelle Levy.
The Ignition Advice position paper argues that, presently, “the advice industry has shrunk and retreated upmarket”.
“Advice has become more complex, less accessible, and significantly more expensive, placing it out of reach for many who might benefit from it. Advice has essentially been withdrawn from middle Australia,” it said.
“In Ms Levy’s world there will be more personal advice, more institutions providing it, and more consumers reaping the benefits of it. However, it is digital advice technology which glues it together,” the Ignition Advice paper said.
“Digital advice allows good advice to be delivered at scale. Digital advice allows people delivering advice to be leveraged. Digital advice allows financial institutions to return to advice, and super funds to expand their advice delivery, in the knowledge that technology will provide assurance their advice is good advice, whether delivered by their people, technology, or both.”
“Ignition welcomes the Proposals Paper and is supportive of the good advice model. It is principles-based, simpler and more direct. Combined with proposals relating to relaxation of documentation requirements such as SoAs, encouragement of institutional participation, broadening the definition of who can provide personal advice, and delivery via digital advice, a good advice standard should substantially increase the supply of advice, particularly for simple advice topics,” Ignition Advice argued.
It said the return of financial institutions as large providers of financial advice, especially simpler advice, was a key pillar of the QAR proposals paper.
In doing so, it claimed that advice had “increasingly become a cottage industry since the Royal Commission” and that “only financial institutions have the source scale to impact advice supply so that there can be a significant improvement to access and affordability.”
These endless repetitive sounds bites about digital advice from product pushers are so tiresome and I have no doubt the proposed QAR blatant advice BID carve-outs for all product providers will finally be the long awaited throwback to the dark days of massive vertical integration….
Is this an article or a paid ad? Of course a digital provider thinks digital advice is the solution.
Given the bank’s appalling history when engaged in providing ”financial advice” is it desirable they are allowed to return? Would the community be better served if they stuck to banking? They have a long history of fouling the nest of any sector they become involved in, outside of core banking.
Banks will come back into financial advice once they destruction they planned is finalised and they won’t have the compliance obligations that restrict their profit making ability. In other words it will probably involve Digital Advice because they hold the same disdain for client outcomes from my experience.