Advisers fearful of regulatory implications of digital advice
Allowing greater clarity over how advisers can use digital advice would be a key improvement for the advice industry, according to abrdn.
The firm had partnered with HUB24 to offer a white label digital advice solution for advice groups which could reduce the time by automating parts of the advice process and would allow them to service more clients.
However, advisers were cautious about whether digital advice would allow them to meet their best interest duty.
Brett Jollie, managing director at abrdn Australia, said: “I would like to see the Government commit to reviewing financial advice and the regulation of advice, particularly for digital advice. That would have significant benefits for the industry.
“We haven’t seen huge uptake in advisers engaging with digital advice because the regulatory regime is too ambiguous. Financial advisers aren’t always confident in using it, there is a lack of clarity. They need to be able to demonstrate that it meets best interest duty and if they aren’t 100% convinced that it will satisfy the regulator then it might impede their desire to take it on.”
While the Hayne Royal Commission had seen much change occur in the industry, Jollie said an unforeseen consequence was that it had made it more difficult and costly for advisers to give advice.
“In some ways, the Royal Commission has made it harder, it was well-intentioned but has imposed greater regulation on advice groups. They haven’t really helped with digital advice.”
He said abrdn would make a submission to the Quality of Advice review via the Financial Services Council.
Jollie added the regulator in the UK, where abrdn was headquartered, had been “far more supportive” of digital advice at scale for the last seven years which gave advisers the confidence that they would not fall foul of the law.
AUTHOR
Laura Dew
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