‘Episodic’ advice practices to be new wave of businesses

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.

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“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.




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Leave that to the banks and industry super funds. It's not a market we'll be operating in. I wonder if my PI insurance, Xplan, Morningstar, ASIC, TPB etc are happy for us to pay "episodic". This is the next wave of vertical integration masking as advice.

Darren's opinions are his own and I can imagine not shared by most. We have been dealing with one off advice episodes for decades and they are not new. Age care advice, is one example of a one off where there is no repeat business.

You have a good point with Aged Care advice, Devil. We do always hope to pick up family members as ongoing advice clients.

I agree with Darren on this. It makes perfect sense that clients/customers approach advice from an event. The Industry has been able to monetise complexity and as a result it has been extremely challenging to accomodate people with "simple" advice needs. The next step is solving this and using tech to do it. This will actually increase the amount of people entering the advice universe.

One of the biggest myths in financial advice is that all problems can be easily solved by "technology". This ignores the fact that technology adds to costs, and in the end it can only have a limited impact because the underlying cause of most problems is bad regulation. The quickest and cheapest way to solve most of the problems is to fix the bad regulation.

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