Fintech presents a strong opportunity to the financial planning profession, but there is a lack of understanding on what its uses and solutions offer to Australian financial services licensees (AFSLs), associations and regulators, according to the Financial Planning Association (FPA).
A white paper on fintech released last week by the FPA said fintech still drew concerns as a cause of fear, discomfort and confusion for many within the financial services industry, a pointed to lack of specificity as the cause.
Defined within the report “fast-paced, dynamic, ever changing, blissfully unaware of financial services regulation, legislation and embedded practice,” and thus still disruptive in its nature, FPA chief executive, Dante De Gori said confusion was expected.
“What has been lacking is a thorough understanding of the solutions on offer to planners,” he said.
Debt management, cash flow and forward planning were identified as the key priorities for Australians, with report suggesting fintech could be moulded to fit the needs of the nation, and see the same success as in the USA.
“The biggest issue for financial planners is not that this is happening, that fact is irrefutable and there is no rewinding of the progress that has already been made,” the report said.
“What is and what should be more concerning is that the financial planning solutions that are being provided are purported to be more collaborative, personal and comprehensive than ever before and the suggestion is that they are as such rivalling the face-to-face proposition.”
The report said three main initiatives that an adaptive financial planning firm would have were:
- Communications that stepped up to the modern age in a modern business
- The ability to offer clients a personal financial management site, application or document vault
- Options to offer financial plans that do not follow a generic path.
At the time of the report’s November release, just one per cent of financial planning practices were identified by the FPA has having effective technology implemented review processes.