Advice gap ‘can only be solved’ by adoption of technologies

Craig Keary, Asia-Pacific chief executive of digital advice provider Ignition believes that rising costs due to regulation has attributed to declining adviser numbers and “the ability of the industry to deliver advice at affordable price points”.

“This advice gap can only be solved by digital advice technologies – there is no other realistic route to providing low-cost, consistent, compliant, robust personal advice at the sort of scale required to materially close the advice gap,” he said.

“The main hurdle for the industry is a lack of conviction about whether digital advice can be delivered in a compliant manner, at scale. This contrasts with the UK financial services industry, where the value and compliant nature of digital advice is now well-accepted by institutions and moving towards mainstream adoption.”

Ignition highlighted this viewpoint in its submission to Treasury for the draft terms of the upcoming Quality of Advice review which also offers a “definitional framework” of digital advice for the industry.

“In our view, digital advice is the digital delivery of personal advice, and a related Statement of Advice, which complies with the Best Interests Duty and other obligations, and encompasses retirement, insurance and investment needs,” Mr Keary said.

Appearing on a recent episode of the ifa Show, Mr Keary claimed that technology adoption in advice has been accelerated by five years due to the impact of the COVID-19 pandemic.

Listen to the full podcast here.

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.