Digital advice ‘central’ to upcoming Quality of Advice Review

Andrew Baker of Ignition said of the review, to be undertaken and delivered this year by ASIC, that there is “no other realistic route” to achieving the review’s goal if digital advice and digital advice technologies are not embraced.

“This conclusion has been obvious to many in Australia’s financial services industry for some years: the past problem has been a lack of sufficiently sophisticated digital advice solutions for institutions to consider,” Mr Baker said.

“However what seemed blue sky even five years ago, is now in production.”

Mr Baker added that while the UK and Irish wealth industries have rapidly adopted hybrid digital advice to address the advice gap, Australia has been slower to move.

“Many institutions have had other priorities in recent years, or have not seen themselves as being in the business of advice provision. Some have been scarred by the Royal Commission experience, or remain wary of the subsequent regulatory uncertainty such as the Westpac general advice case,” he said.

“While Ignition’s view is that digital advice can already be embraced in a fully compliant manner, it’s likely that the QoA review will further ease concerns about risk and compliance in relation to digital advice.”

It comes after Ignition chief executive Craig Keary last week said that the effects of the COVID-19 pandemic will shape the advice industry “for many years to come” and as such, the take-up of technologies by businesses has accelerated.

“We have already reached the point where doing nothing is no longer an option,” Mr Keary said.

“Organisations – whether financial planning firms or large institutions – that fail to implement appropriate digital offerings will struggle to remain relevant.”

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.