A digital component to advice is essential in make financial advice more affordable but the platforms need to be simple, according to a panel.
Speaking at the Australian Institute of Superannuation Trustees (AIST) Super Financial Advice Symposium, Iress head of advice, Glenn Boyes, said the digital advice model was the future and that while there had been a lot of success with portfolio modelling type tools, the advice component was where complexity came in.
“It’s not a binary decision of robo versus human. We can’t service the unmet advice needs without any sort of digital advice offerings going forward so we’ve got a strong belief that a hybrid advice model is the way of the future,” Boyes said.
“A combination of digital, phone-based and face-to-face elements are all essential to the advice proposition and obviously technology plays a critical role in bringing all of these elements together.”
Mills Oakley partner, Mark Bland, agreed and said a digital offering was an essential component to making advice more affordable.
“It’s achievable until a point but some clarity in the regulatory obligations is going to be essential for it to take off,” he said.
Boyes noted the biggest challenge in creating a digital advice offering what making it simple.
“It comes back into having an understanding of the success method and what you’re trying to achieve. It’s not about picking up what humans have done and making it digital and thinking it will be successful. It’s not a point in time solution as well,” he said.
“It’s a journey and you need to iterate a number of times to get there over time.
“While it is easy for us to whack fields and get a data up in to a model it’s the storytelling that sits beyond that is equally as powerful.
“We’re building the hybrid analysis of the numbers and the ’what if’ analysis, but it’s telling the story along the way and explaining why. It’s about putting the power and emotion of storytelling behind the digital experience.”
HESTA chief advice officer, Joshua Parisotto, noted that a successful digital advice model had a good user experience and a simplified process.
“It’s really easy to replicate a face-to-face process for a digital tool when it’s probably not suitable. Typically time frames people are going for with digital tools are not long. It is really important to simplify that,” he said.
“You’ve got to have a really good user experience and a simplified process. The more complex it is, the less time they’re going to spend. They’ll look at a tool and say: ‘oh I have to put in 45 fields, I’m out – I’ll just make a phone call instead’.”