Early-stage advice can prevent wealth inequality
If the advice industry can be scaled to help people at earlier life stages with less assets, the industry can potentially help reduce wealth inequality, according to Ignition advice.
The firm released an insights paper ‘Digital advice and social responsibility’ which outlined how financial advice could be used to help reduce poverty and improve wellbeing.
Financial advice could help with four of the 17 UN sustainable development goals:
- End poverty;
- Ensure healthy lives wellbeing;
- Promote inclusive and sustainable growth; and
- Reduce inequality
Craig Keary, Ignition Asia Pacific chief executive, said the need for advice had never been greater but it was still out of reach for too many people.
“If I think about the benefit of advice, if its accessible and cost effective, it absolutely can be a leveller for people early on when they may not necessarily be able to afford it in a traditional way to reduce that inequality over time,” Keary said.
“The value of advice is huge, just the ability for somebody to be able to start saving earlier, to make sure that they’re in the right fund to make sure they’ve got the right level of insurance cover; the value of advice is unquestionable.
“What has been the challenge, is with distribution disruption happening – not just here in Australia, but globally – the affordability of that meant people couldn’t access that value.
“But what we do know is that people want a piece of advice that will help them get through that life event and make sure they’re not financial disadvantaged.”
Keary said philosophically within the organisation at Ignition, they were big believers in the value of advice and how to expand it.
“And when we’re talking to big institutions they absolutely believe in the value of advice but the issue now has been how you can deliver at scale,” Keary said.
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