Regulation not conducive to provide advice at scale
The UK’s Retail Distribution Review (RDR) has given a teaser for what the advice landscape in Australia could look like in five years, but only if the regulatory landscape becomes conducive to technological innovation, according to abrdn.
The newly-rebranded firm, formerly known as Aberdeen Standard Investments in Australia previously, was still one of the biggest financial services firms in the UK.
Brett Jollie, abrdn Australia managing director, said Australia had a lot to learn from the UK experience of the RDR.
“A lot of what we’re seeing now, technology has been rolled out as a real solution over there more effectively than we’re seeing here,” Jollie said.
“It’s a challenging area right now; the regulations in Australia are not conducive to providing limits of personal advice at scale through technology.
“That is a burden hindrance to building out the technology solutions in this country. We need regulatory change, I think the Government recognises this, they’ve committed to reviewing the sector.
“That’s one of the biggest differences we’re seeing between the UK experience. We are the largest platform provider in the UK, we run our own advice groups, we’ve rolled out technology to support not only our own advice groups, but third-party group and it’s been rolled out very successfully.”
Jollie said part of the firms’ integrated growth strategy for Australia was the development of independent digital investment solutions.
“This is bringing technology to Australia that we’ve developed in-house in the UK… our technology is utilised by over 50% of UK advisers,” Jollie said.
“This is technology to support advisers in the UK… they’re probably about five years ahead of us, so we’re bring that experience to the market.”
However, Jolie said the firm was still working through the uncertainties around regulation.
“It’s a problem for advisers because advisers are taking a very conservative approach to adopting these technology solutions,” Jolie said.
“They do exist, it’s just unclear to them whether they can demonstrate satisfying the legal and regulatory obligations, particularly best interest duty.
“It’s something we’ve identified as an issue but certainly we can learn from the UK experience.”
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