Entry-level financial advice will become commoditised and moved online as a result of the demand for low-cost investment and advice provided by technology-driven service providers.
These providers will also disrupt the traditional planning model as they seek to service the '$10k client’ who has to date been overlooked or priced out of the advice market, according to Stockspot founder Chris Brycki.
“Technology will eat into financial services as a profession and an industry, which at present represents 13 per cent of the national workforce, especially those roles in finance which are only related to moving capital around,” Brycki said.
“This shift has already happened in media, travel and retail, and many people who had jobs have seen them commoditised online. This has also happened in financial services in the UK, Europe and the US where the laws are less onerous and restrictive about this kind of shift.
“There are high cost and low cost options available for investments and advice, and it seems we do not need more of the former but much more of the latter because entry-level investors - those with $10,000 to invest - are not accessing the market for investments or advice.”
Brycki said that he was not opposed to financial advice, but had concerns about the impact of fees on the end position of an investor.
“Advice is good but the cost-benefit can be negated by the administration, investment and advice fees. As a result it is easy to be cynical about the benefit of holistic advice for investors in some cases because the planner is getting paid anyway.”