The financial advice industry has an opportunity to meet the demand for ongoing advice and ‘episodic’ advice, according to IOOF.
IOOF head of advice, Darren Whereat, told Money Management that as ‘episodic’, ‘event driven’, or ‘transactional advice’ was increasing, there would be a wave of new businesses that would only service this kind of clientele.
“We feel like there’s another generation of consumers that want advice but don’t want to be paying for ongoing advice,” Whereat said.
“As an industry there is an opportunity for us to meet the demand for those services but you need to do it in a way that’s both cost effective for the client and ensures the adviser can meet their obligations for best interest duty.”
When asked how small advice practices would be able to service only episodic advice at a lower cost compared to ongoing advice as well as having to pay for other fees and levies, Whereat said the answer was in how to marry up the needs of clients with technology.
“Clearly technology is going to play a role in that. Advisers will have to digitise the factfinding experience and remove some of the cost layers that sit in there. You’ve got to be able to get the cost of advice down and at scale,” he said.
“We’ve got to look at the way to deliver advice as the manual process is a thing of the past.”
However, Whereat noted that servicing episodic advice clients would not be for everyone.
“Some will continue to operate in only in the high net worth space,, some for pre and post retirees, but we’ll see another wave of businesses look at this episodic advice which will pop up and operate next to those businesses. Not one size suits everybody,” he said.