ASIC should outlaw robo-advice
The do-it-yourself concept of robo-advice, where clients receive a financial plan through the use of complex algorithms without the involvement of a human adviser is a "complete cop-out", Wealth Today said.
The financial planning dealer group's managing director, Greg Pennells, hit out at the concept, arguing the Australian Securities and Investments Commission should ban the "ridiculous innovation" in financial planning.
"It amuses me that financial planners operating at major banks continue to get themselves into trouble and give our industry a bad name," Pennells said.
"Their response is to push the barrow for robo-advice and its one-size fits all approach to no-advice financial planning. It's outrageous."
This approach clashes with his and Wealth Today's group of advisers' practice of providing holistic financial planning and advice, he said.
Financial planners constantly educate themselves to keep abreast of developments and financial instruments available in the marketplace, while clients would not fully understand the options available to them.
Robo-advice, even with its facility to offer automated, self-serve or guided service using tools such as web chat would not capable of providing customised financial plans to suit each individual's financial goals.
One conversation with a financial planner could throw light on financial issues the client had not even considered.
"To leave them to their own devices when it comes to something as crucial as planning and securing their financial futures is ludicrous," Pennells said.
"The robo-advice advocates are saying ‘Do it yourself mate!' That's not service at all — it's a complete cop-out."
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