Fintech launches $300 limited advice SoA
Fintech MoneyGPS has launched an offering that aims to allow Australians who are unable to afford comprehensive financial advice access limited advice for $300.
MoneyGPS chief executive, George Haramis, said his offering could build the bridge for everyday working Australians who were not high net worth or sophisticated investors.
“We believe that using technology, particularly now, could solve that problem and can bridge that gap,” he said.
The advice given was fully client-led and would generate single issue advice.
First there was an initial money check-up questionnaire where potential clients would fill out their financial and health situation and a factual report would be generated that highlighted specific advice needs for their circumstance.
The program would then curate a range of statements of advice (SoA) the client would be eligible along with identifying needs that did not require an SoA.
Clients could then complete another questionnaire for the SoA they wanted on a single topic.
“We do have a number of rules within the calculation engine, which have been prepared by qualified advisers and have been reviewed by compliance and legal, which determine the outcome for the client to make sure that whatever SoA that we suggest they look at, is in their best interest,” Haramis said.
The initial money check-up questionnaire was free and an SoA was priced at $270 plus GST.
“It's very cheap because we can scale and we use technology. And it means that we don't have advisers, or paraplanners having to do this which is a costly exercise,” he said.
“We are having a number of chats to advisory groups and superannuation funds to work alongside the traditional, more comprehensive advice based services, to cater for people that can’t afford you know the ever growing cost of advice. But at least they can start to access affordable advice on a needs basis, one topic at a time.
“We use a calculation engine that uses stochastic modelling. It is the rules ingrained into the engine that defines the statement of advice output. So the actual advice is fully client led advice without the need of a human looking at the advice or an adviser assisting in any way.”
Clients would speak to a client care specialist that was RG146 compliant if they wanted to discuss the outcome of the report but would not receive financial advice as the advice was delivered by the Australian financial services licence (AFSL).
Clients could also be referred to an adviser partnered with MoneyGPS if they needed comprehensive advice.
In terms of trusting the artificial intelligence (AI) advice, Haramis said there was not human biases as the advice was based on rules and algorithms that was governed by legislation.
When asked on how the program could cater for changing life circumstances, Haramis said the firm would launch an ongoing advice program and regular reviews in the new year.
“The problem being the affordability of advice can be solved by using technology. Technology exists today that can provide a range of different types of solutions to deliver advice to people,” he said.
“It's a matter of the AFSL, the super funds, the institutions or other groups becoming comfortable enough with the process that the tech provider can deliver, and making sure that their rules and processes adhere to the regulations that any AFSL needs to adhere to.
“So, the tech exists to solve the problem. We can now solve the affordability of advice.”
Recommended for you
The top five licensees are demonstrating a “strong recovery” from losses in the first half of the year, and the gap is narrowing between their respective adviser numbers.
With many advisers preparing to retire or sell up, business advisory firm Business Health believes advisers need to take a proactive approach to informing their clients of succession plans.
Retirement commentators have flagged that almost a third of Australians over 50 are unprepared for the longevity of retirement and are falling behind APAC peers in their preparations and advice engagement.
As private markets continue to garner investor interest, Netwealth’s series of private market reports have revealed how much advisers and wealth managers are allocating, as well as a growing attraction to evergreen funds.
