Financial Services Industry not delivering to the public

5 March 2024
| By Advice Online |
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The financial services industry awaits in limbo the final legislation arising from the QAR recommendations. The government intention is to broaden the provision of advice to the public.  Those financial advice groups who are preparing for engagement with the public, in addition to their current clientele will be the winners. 

 

More than half of Australians under 40 are open to paying for financial advice.  It is hard to imagine any industry failing to service such a high percentage of their potential market.  Financial adviser groups who can deliver affordable advice while still being profitable have a huge untapped market.

 

The research company, Investment Trends, completed the comprehensive Financial Advice Report.  

 

The key take-away is that 12.6 million (61 per cent) of Australians have unmet financial advice needs.

 

For the average working Australian, their advice needs could be considered more of a strategy document, giving details of what the client needs to do over the short term, say five to ten years.  This could include debt management, insurance advice and saving for retirement, etc.  

 

Financial advice can be an online digital collaboration between the adviser and the client, where the client and software does most of the work.  Imagine the client entering full financial facts and goals via a secure encrypted portal with software assessing cash flows and producing a financial plan.  All that remains is for the adviser to write advice specific to the client and generating an Advice Record.

 

The delivery of financial advice could be more valuable if the process included a Financial Literacy Program. 

 

Expanding the service providers for financial advice to Superannuation Funds

 

The government has indicated that there are insufficient financial advisers to service the market.  They have announced that the provision of financial advice needs to be expanded to include Superannuation Funds.  However, it will take time for new advisers to gain adequate qualifications.  The inclusion of the new category of adviser, currently referred to as a “Qualified Adviser” will also take time for them to acquire adequate skills.  

 

Superannuation Funds and any other sectors granted access to the provision of financial advice will face the problem of delivering online advice to large numbers of clients.  

 

Better CRMS to improve workflow.

 

Worksorted, is an extremely intuitive CRM, workflow, and revenue management solution. The system incorporates various compliance tools along with the ability to manage FDS and Opt-In individually or in bulk.  

Simon Betchley, CEO of Worksorted has been in the Financial Services Industry for many years Glenis Phillips the designer of Advice Online, asked Simon to draw on his vast experience to give his view of what is required to make Financial Planning practices more efficient.

His response was:

“In order to significantly reduce the cost to service clients, advice practices must embrace best-of-breed technology solutions to streamline operations, reduce overhead expenses, and boost practice productivity.

The right technology enables advisers to allocate more time and resources to providing personalized advice and value-added services to a broader client base without compromising quality. With automation and digitization of routine tasks, the practice can focus on building stronger client relationships and trust. Moreover, the right technology will facilitate enhanced client engagement and communication, ensuring a seamless and efficient advice experience.

Ultimately, by harnessing the capabilities of technology, financial advice practices are able to deliver high-quality advice, to more people, at a more accessible price point."

Solutions to providing affordable financial advice

 

While AI may offer productivity improvements, its major costs, unproven predictability and delays may prove problematic.

 

Australian FinTech’s have been working to provide the financial service industry with alternative solutions.  The problem is that the larger dealer groups seem reluctant to embrace technology from small FinTech’s and are missing great opportunities.

 

One innovative FinTech is Plencore Wealth Ltd, which has been providing the Financial Mappers software for over ten years.  In response to the QAR, Advice Online has developed software for one purpose only:

 

Deliver affordable financial advice to the mass market

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