Centrepoint trials robo-advice

Centrepoint Alliance (CAF) is conducting a trial of robo-advice solutions within its salaried advice network with CAF managing director John de Zwart stating it produces tailored statements of advice faster than an adviser or paraplanner.

De Zwart declined to name the service provider that was working with the CAF's salaried advice group — Alliance Wealth — but said the trial was covering simple risk and superannuation needs for entry level clients.

He said the trial was part of ongoing investment into the business over the past 12 months and follows CAF reporting an $3.3 million profit at the end of the last financial year and the launch of its own managed account offering in August 2014.

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De Zwart said the creation of financial plans and meeting compliance requirements was occupying too much time for advisers within an internal survey of CAF advisers indicating the average adviser spent 72 per cent of their time on compliance and administration.

"The best advisers are not always the best technicians but they do have good empathy with their clients and can enact behavourial change with them," he said.

"People are at their technical best in their mid to late 20s and once they move into more senior levels they are better at people management and marketing. We see this in accounting firms where the best relationship people are not the best technicians."

De Zwart said a number of planning groups are moving away from the concept of financial planning to financial coaches supported by back office services to build a financial plan.

"This is where advice will head and we will see advisers overseeing a team of technicians producing the actual plans. Much of this will be automated and this is where we see robo-advice meeting financial planning."

De Zwart said the CPAL group was also continuing with its rebranding and would drop its own logo as well as that of Professional Investment Services (PIS) while it considered new branding that more closely integrated the businesses held within the wider group.

He said PIS was likely to retain its name with a straw poll of advisers in the planning group indicating the majority were willing to retain the name for the time being.




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Comments

Nothing could be more different to financial advice than a tomato except that financial advice may suffer the same fate as the humble tomato.
To supply out of season tomatoes, the popular tasty varieties were found to not travel particularly well. Instead of devising better ways of packaging, the industry bred varieties with tough skins more able to endure transport. An unfortunate side effect was that the fruit became bland with a pulpy texture and hard to slice. I for one, rarely eat tomatoes these days as a result of the inferior quality of the product.
Surely the real problem is the system which causes advisers to use 72% of their time on compliance and administration. Instead of coming up with solutions that risk denigrating the financial advice product making it even less likely to be sought by consumers, I suggest it would be more beneficial to address the problems which cause the major cost to what is basically a good product. That is, over regulation, the ludicrous and ineffective rules and regulations which are hard to interpret, apply and to comply with. As much as I abhor the instability bought about by change, I believe a major and all encompassing overhaul of the whole financial sector needs be done with the objective getting rid of the sacred cows, better and more streamlined regulatory regime and we may not need to consider such measures as introducing robo planners for the simple reason that the system has become too costly and unwieldy.

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