The knowledge of how consumers prefer to access financial advice could help drive the shift away from traditional advice into consumer-led advice and comes in handy when designing new service model concepts, according to Industry Fund Services (IFS).
In its white paper ‘Reimagining how Australians access help and advice’ the firm singled out three of the most common avenues in which consumers access advice.
This included online (self) discovery, understood as having access to relevant and reliable targeted information based on consumers’ personal situation and life stage, followed by a process described as ‘learning with peers’, meaning consumers relied on the experience of other people in similar positions to theirs in how they approached or were approaching advice.
This would also be an opportunity to create a platform where people at similar life stages and with similar needs could share their personal experiences and learnings with peers.
The third way included access to an expert and the ease of engaging one. According to the paper, most people needed to know who they could go to when they needed expert advice and needed clarity about what it would cost and what the process would include.
Industry Fund Services (IFS) executive manager, Adrian Gervasoni, said the thinking around financial advice service models was often driven by regulation rather than underlying consumer needs.
“For some time, we were thinking why is it that we revert back to the same service delivery models, and we had that sort of clarity moment – it’s often because we start with what the rules allow first and then we are trying to get creative from there.”
Gervasoni said there were too few people receiving advice, specifically around retirement planning, and that led his firm to take a closer look at how to design a service model concept while staying solely focused on consumer needs.
“We had consulting helpers who helped around managing this project and a whole bunch of organisations engaged, the steering committee comprised of a couple of technology companies, a couple of super funds, consumer advocacy group and a research house,” he said.
“There were a number of interesting things about how people go about giving help, and there was an element of self-discovery, engaging with a peer and seeking out the help of an expert. Out of these three ideas, I think moderated peer community is probably the one that is most controversial.”
According to Gervasoni, peer community groups presented the biggest challenges as it was difficult for the regulator to control but, at the same time, the use of support communities was commonplace in other industries.
“So we really saw this as the avenue that we want to explore further first just because it’s potentially scalable but it also brings a different element to what advice can be shared,” he said.
“We think about the advice as how it’s defined in regulation and in law, but there is a human element to it when we are talking about the retirement and what people would do in retirement and how they would form new friendship groups.”
These are sort of things that the traditional advice models struggled to deal with very well and there was value in relying on other people’s similar experiences.
“If someone has recently been through a big life event and there is lots of knowledge that they have built up which should be valuable to someone else, and if we could find a way in a structured and safe space they could share their insights and reflections then it would be useful to someone else.”