Attempts to introduce robo-advice into the Australian market have overlooked the fact that has not worked anywhere else in the world, according to the Association of Independently Owned Financial Professionals (AIOFP).
Peter Johnston, AIOFP executive director, said the introduction of robo-advice compared to the vertical integration model introduced by the banks.
“The greatest industry conflict over the past 30 years has been when the banks introduced the profoundly conflicted vertical integration advice model, this is a very similar concept without the human content,” Johnston said.
“It just another ‘sneaky’ strategy to only offer an in-house product to already existing clients regardless of their quality.
“It is about time academics and bureaucrats, who live in a different world to most and never given advice or seen a consumer are removed from the industry debate.”
Johnston said politicians, the Australian Securities and Investments Commissions, and consumer groups failed to recognise the advice community did not want “bad eggs” in the industry.
“This failure has resulted in inexperienced humans making naive decisions resulting in massive red tape strangulation, duplication and ridiculous uncommercial conditions that ironically consumers are indirectly paying for,” Johnston said.
“There is a minor place for robo-advice going forward in conjunction with human advisers to assist when things go wrong with markets and/or products.
“The last thing we want are a bunch of academics trying to develop a conflicted product to ‘clip’ the ticket on industry revenue.”