FSC backs legitimate role for digital advice
The Financial Services Council (FSC) has pointed to new research supporting an increasing role for digital advice as an entrée to more holistic advice.
Drawing on the findings of a report – The Role and Value of Digital Advice in Australia – the FSC acknowledged that it is the product of industry interviews and national consumer research.
The essence of the FSC message is that solid digital advice tools are emerging as “a trusted, accessible alternative to unregulated online services, helping individual navigate financial decisions with greater confidence.
The report is the product of CoreData and Borromean Consulting, with the FSC stressing that, “importantly, digital advice is not replacing professional human advice but serves as a pathway to deeper engagement.
It drew from the report that “a majority (56%) of Australians with an ongoing relationship with a financial adviser see digital advice tools as valuable alongside human advice, with strong support also among those with ad hoc (47%) or no prior advice relationships (42%)”.
“Digital advice is complementing traditional advice by meeting Australians where they are – providing simple, accessible guidance that can scale with their needs over time,” FSC chief executive, Blake Briggs said.
“In an environment where many are seeking financial peace of mind and turning to unregulated ‘finfluencers’ and artificial intelligence for information, digital tools from trusted providers offer a more reliable pathway to informed decision-making and greater confidence.”
The FSC said the report shows that consumers who engage with digital tools are more likely to seek further professional advice and take action on their financial goals.
The majority of digital tool users indicated that they are likely to seek full professional advice about retirement adequacy and investments in the future. Among pre-retirees (aged 55-59), digital users are more than three times more likely to seek financial advice in the next 12 months compared to non-users.
Briggs suggested the finding have implications for the Government’s still unfinished Delivering Better Financial Outcome(DBFO) Tranche 2 reforms.
“Tranche 2 remains an important priority for widening access to scalable, accessible advice. However, mature players in the superannuation industry are already acting, rolling out innovative, affordable hybrid advice solutions.
“As this report makes clear, progress in providing accessible advice is happening regardless of the pace of Government reform, ensuring more Australians are equipped to engage with their financial future, gain peace of mind, and take control of their retirement,” Briggs said.
The FSC nominated the key findings of the report as being:
| Digital advice users are more likely to seek financial advice |
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| Digital advice users are more likely to engage with professional retirement adequacy and investment advice in the next year, with the majority indicating they are more likely to engage with full professional advice in the future |
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| Digital advice users are more likely to seek advice sooner |
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| All age cohorts are comfortable engaging with a combination of human and digital advice (hybrid models), particularly among older Australians |
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| Trust in artificial intelligence-enabled advice increases when human judgement is explicitly part of the model |
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