Technology, efficiency to lead the way for IOOF

Speaking at the AFA Virtual Conference’s licensee panel on Thursday, IOOF chief advice officer Darren Whereat outlined a number of ‘essentials’ the business would embed in its dealer groups going forward to tackle the rising cost of advice and ensure its planners were operating as efficiently as possible.

“The non negotiables are governance – you have to get governance as a level where your framework makes it easier for your advisers to give advice time and again, and we want them to be able to do it at a cost that is lower than it has been in the past,” Mr Whereat said. 

“The role of a licensee is also to provide opportunities for people to peer check and if something is working over here [in one business], it’s good for the industry and it can be replicated. 

“The third thing for us is investing in technology. We’ve made a big play in acquiring Wealth Central, a proprietary platform we’ve been developing for two years. That is about making the process more engaging for clients so it removes the spooky nature attached to the context of what advice is, and it’s also about making advisers more efficient to operate in the space. 

“The cost of advice has gone up, and we feel [technology] can make a big difference to bring those costs down.”

Mr Whereat also flagged that IOOF was encouraging its advisers to investigate new service models, including different tiers of offerings depending on the level of service the client required.

“The number of people that get advice is about one in five and it has been like that forever. If only one in five for the last 20 years are engaging with us, what are [the others] looking for? They don’t want to pay for ongoing service, they only have an immediate need, therefore as an industry there’s an opportunity for us to have different models for different clients,” he said.

“You need to understand what your cost to serve is, so as a business you are charging the right client for the right way they’re engaging you, and there are no subsidies existing in the AFSL and the adviser’s business. 

“We need to elevate [the conversation] away from how and who gets advice, and make it ‘just get advice’. If you want an ongoing adviser there’s a way for that, or if you want a transactional relationship, advisers are getting better at understanding that there are people out there we can help but they’re not ready for that ongoing relationship.”

Mr Whereat said the group also had a role to play in publicly advocating for the value of advice, and said it had conducted research into the topic that it would be taking to regulators, politicians and the media to help champion the profession.

The news comes following IOOF’s acquisition of MLC in September, which could see the group become the biggest adviser force in the country depending on how many MLC advisers make the move across to IOOF.