Digital advice will crunch advice costs
Digital advice has the potential to reduce costs on simple advice to 1/100th of their current levels according to a cloud based platform provider who claimed that most advice providers were wrestling with how to deploy online, robo and digital advice.
Decimal chief executive, Carolyn Colley, said for a medium size advice group the provision of simple advice around investments or insurance could be drastically reduced to well below its current cost.
Colley stated that licensing costs divided by the number of clients using a service like Decimal should push down the cost of advice as the compliance and Statement of Advice (SOA) creation is automated and processed faster than with human interaction.
"The reduction in costs for complex advice are likely to be less extreme because the data collection will require more adviser-client interaction but the compliance and SOA costs will still be reduced and automated within parameters set by the licensee," Colley said.
The comments follow the recent announcement that Decimal had been chosen by Centrepoint Alliance as its digital advice partner for its salaried advice business Alliance Wealth & Protection.
That announcement was the fourth deal struck by Decimal with Colley stating that it was approaching banks who were exploring their advice models and direct distributors of life insurance to gauge interest in Decimal's cloud based advice platform.
According to Colley these groups were all looking at how they can systematise compliance to reduce costs while offering customers a better online experience and connecting their digital offerings to their current phone based and face to face advice channels.
"The core offering of banks are built around investments and reporting with little in the way of technology and platforms around advice," Colley said.
"Strategically they are all facing the same thing around providing a better customer experience but their ability to deliver will depend on their internal resources and products."
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