Robo-advice should excite advisers: Hume

Robo-advice is the future of financial advice and that should not cause concern for advisers but make them excited, according to the Minister for Superannuation, Financial Services and the Digital Economy, Senator Jane Hume.

Speaking at the Association of Financial Advisers (AFA) conference on Tuesday, Hume said robo-advice and digitally augmented advice were going to make financial advice more accessible and affordable.

“Digital advice will not replace advisers, it will augment them and enhance their capabilities. Advisers will be able to better serve more clients at lower costs, helping make advice more affordable and accessible than ever,” she said.

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Hume noted while no product provider had “cracked the nut” of a full service robo-advice, when the issue was “cracked” it would create a “fantastic product” but would not replace the 18,000 or so advisers practicing in the country.

“What robo-advice and other digital tools will do is offer an alternative for people who don’t currently have access to an adviser, or who wouldn’t pay for an adviser. It will get young people more engaged with their finances. And it may act as a gateway to full service financial advice,” Hume said.

“As a mother of three young adults I can tell you that many young people would prefer to first engage with an app than a human. But as their financial circumstances become more complex, as this generation of young people become more affluent, have more assets, they will then seek out more complete services – an adviser who can provide the additional value-add, and tailored understanding of their personal situation.

“Robo-advice should not cause concern, it should make you excited at the opportunity you have to create a fantastic pipeline of clients for full service advice. That is the future of financial advice.”

Hume pointed to the Consumer Data Right (CDR) and said this would allow data-driven innovation to help create new products, services and jobs.

“The Government is considering changes to the CDR, designed to reduce barriers to participation and enable consumers to better leverage their data in banking. This includes giving consumers more choice about who they share their data with, such as their financial adviser, mortgage broker, accountant or tax agent,” she said.

“If advisers could – with the consent of the client – have access to a new client’s financial history, imagine how much more efficient your practices could be in serving your clients, and with that, deliver advice at lower costs to consumers.”

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What rubbish.
Hume is spouting garbage.
Just another politician who wants to appear trendy and "with it".

She is so disconnected. I am trying to figure out how she is hardwired

While there are some people who will require 'personal advice' and will pay a financial planner - there are those who don't necessarily need that service and are confident to 'go robo' via a product provider. The only downside for the financial planners is the possible loss of income. If a person goes robo and suffers because of that decision, that is their problem.

If a person suffers because of bad unlicensed financial advice, it is not just their problem. It is also the problem of professional, licensed advisers.

The current regulatory and media approach is to blame licensed advisers for all bad advice, even when they are clearly not at fault. ASIC and the media deliberately call fraudsters "financial advisers" even when they know this to be untrue. The regulatory and compensation funding model is only levied on licensed advisers, even though most harm is perpetrated by unlicensed providers who pay nothing.

Thanks to the regulatory focus on persecuting licensed advisers rather than protecting consumers, dodgy "robo" and "Tik Tok" advice is harming legitimate advisers just as much as it is harming consumers.

I am sorry, what planet is this minister on?

This is what happens when the lunatics run the asylum!

My god Hume is another nightmare. Supports Intra Fund Advice and this. Guess she is looking for the votes from Robo Advice Software? Good luck Liberals.

Robo-advice is a sales funnel tool ... lets stop calling it "robo advice" call it an education tool/ they already have these by the way....

I think Jane say's it all "product manufacturers" not advice companies... I would believe this statement if only advice companies were allowed to use it.

Jane is starting to show her cards now, relax rules for robo (product sales funnels)... next will be open up intra fund advice to all advice . no the client can't pay fee for service like everyone else how would the super funds charge everyone for a service they most don't use?

100% agree, the setting up to green light more Intra Fund Sales to cover all Advice and a free for all no REGs Robo world is Hume, Frydenberg, ASICs and Industry Supers game.
And keep over regulating and killing Real Advisers

No wonder many view her as a lightweight… dribble

Dear Ms Minister for Robo Advice Hume,
Clearly your no.1 agenda fed directly to you via Frydenberg is to promote Robo Advice for the banks.
We get your conflicted and disgusting agenda but we totally disagree.
Robo Advice in Australia is a complete myth in our most over regulated Advice world.
Adviser must band together with our clients and show these LNP clowns the exit door they show us.
Out with Hume
Out with Frydenberg
Clean out ASIC starting with ms Press.
Hume you are SO WRONG !!!!!!!

Ben, we normally agree, on this issue not so. I am looking forward to having a decent Robo advice offer in my business as it will be a nursery for rich clients kids, younger people, risk only etc and provide non comprehensive advice solution. Comprehensive is all we do except for risk only.

Yes the current reg framework doesn't make this easy and I'd be really interested to know where the liability lies when things will inevitably go wrong. That doesn't mean to say we shouldn't look at developing this sector as it does have merit in my view and can potentially add value to my business in the long run.

The really concerning thing for me is she thinks there's still 18,000 advisers out there. We are currently 15,000 registered and I understand there are multiple licenses for some meaning less than 15,000 actual advisers.

Geeze - calm down. Professional Financial Advisers have nothing to worry about.

I suspect you lack the qualifications to make that statement.

Is that the best you can come with mate.

Sorry, I am not likely to be calling you a mate.

Don't waste your time engaging with Herewego. They aren't interested in a decent discussion. It seems their intent is more along the lines of trolling.

Algorithms over humans. Moronic.

Happened in the sharemarket... anybody else remember 1987? LMAO

There are a lot of people around now days who know a lot and some call themselves "experts" - but not many would have any experience at anything. If you asked them about 1987, they would have a puzzled look - but their confidence in their own self belief would not be affected. An education system that never falls a student produces confidence - but not much else.

Trouble is low cost affordable advice leaves little margin for profit and income for self employed advisers.
Maybe good for the big boys that can spend money on automated robo advice and funnel that into platforms they run...all in the clients best interests of course.

Senator Jane Hume, you need to resign as your role is obsolete. Obviously there is no need for you as your portfolio can be picked up by another Senator or at least be managed by a computer and some algorithms.

Actually that wasn’t Ben Dovers comment, but I the Real Ben Dover fully agrees.
Someone trying to imitate Ben Dover, I’m
flattered :-)

Will the real Ben Dover please bend over.

Are you the Real Fin Shady?

Some would say that Robo-Advice already exists, it's called the ASIC MoneySmart website.......and good luck to you structuring your financial empire using that one.

Robo advice has not worked in Australia, many have tried, failed and walked away. Why? The massive level of red tape and regulation. Odds on this will be the next area that gets a regulation carve out. Then just wait for the banks to re enter financial planning without any of those pesky advisers to worry about.

The only thing 6hat excites me is the prospect of seeing this totally incompetent out of her depth minister eventually thrown from office.

Sorry, but you have NO IDEA Senator Hume. People don't know what they don't know. Yes, people can play around with online tools but that's about the extent of it; 'playtime'. Sadly, the regulators and ineffective Industry Associations have driven the Advice Industry to it's knees from which it might not be able to recover.

Artificial intelligence is the simulation of human intelligence processes include learning (the acquisition of information and rules for using the information), reasoning (using rules to reach approximate or definite conclusions) and self-correction. Our Politicians have failed learning, reasoning and self-correction in the financial advising sector with multiple forms of abuse to advisers and their client base, causing ASIC to impose The (Politicians) Law and fail as a functional regulator, both of which would be better replaced with a functional Artificial Intelligence instrumentality. Do you remember the saying "the pot called the kettle black"? ... delusional definition "characterized by or holding idiosyncratic beliefs or impressions that are contradicted by reality or rational argument, typically as a symptom of mental disorder"

It would be much easier to introduce 'robo politician'....Consider this: You have your app, you vote for your politician. Could even build it so that the politician actually votes in accordance with his/her constituents wishes by enabling thumbs up/down on certain legislation (rather than simply toeing the party line). We could reduce politicians by 75% (made up figure, but surely I must be close). Link it to mygov. easy as!

Even her political judgement for her and her party’s self interest is appalling on this one. Wtf.

“Robo-advice should not cause concern, it should make you excited at the opportunity you have to create a fantastic pipeline of clients for full service advice. That is the future of financial advice.”

Errr... Shouldn't that be something we aspire to achieving now without robo-advice?

Wow..... what have we been doing all this time.....?

I'm genuinely flummoxed by this.

It's because we are currently turning away clients that we can't afford to service due to over regulation and excessive business risks imposed by FASEA (I disagree with elements of FASEA not the principle). Keeps them connected with the business whilst giving some support until either the regulations become manageable for those clients or they grow into full service comprehensive clients. Client wins, we win = good outcome.

There is no solution for this at the moment, doesn't mean there won't be in the future.

The solution will be when the profession is allowed to operate on a principles based regulatory regime rather than the prescriptive world which currently exists.

100% bang on Max, you could not be correct but I fear, at least for the next 3-5 years, both you and I are living in dreamland with that hope.

I do not fear robo advice, bring it on, as she says it could well help more people get information.

But please Ms Hume can you give us a level playing field. Dont let the robots or 'general advice' or finfluencers get away with being able to do things that we full service advisers cannot.

ASIC is habitual at blaming and banning advisers, not the employees and Executives of big powerful financial institutions, eg, 2010 Timberwolf scandal that saw the loss of $1 billion in Australian superannuation (D'Aloisio questioned the advice, not the non-disclosure of big-powerful dealing in it own securities?). Big powerful financial institutions are likely to use robo-advice to bypass human advisers (responsible liable) to become the new Timberwolves' robos (not responsible, not liable).

I think senator Hume is right.... we'll have many more new clients once the mess up their financial planning with robo- solutions. That is, if they recognise they mess it up, which may not actually occur...

Consider the current industry super situation. Most industry funds provide mediocre (at best) returns, but their clients think they're doing fantastically. However, this is still their "dirty little secret". :P

It takes a human adviser to navigate a client's individual specific psychometrics, what a client says compared to what they are meaning to say, is qualitative inducement by the financial adviser in the client's best interests. Then trust, confidence and consistency in FASEA Standards in respect to the client's longer term interest is again, qualitative judgement, not quantitative machine robotic in pre-set parameters. Has Senator Hume read George Orwell's "1984" so robo-advice could become "big brother" revisited?

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