ART to unveil end-to-end digital advice platform, not pro-vertical integration

Speaking at the Australian Retirement Trust’s (ART) investment panel for financial advisers, Anne Fuchs, the fund’s head of advice, revealed that the fund is set to shortly begin work on a new advice offering for its members. 

In the final report of the Quality of Advice Review (QAR), lead reviewer Michelle Levy proposed that banks, superannuation funds, and insurers should be permitted to offer limited advice without being bound by the best interest duty. Instead, the QAR lead proposed the introduction of a good advice duty that would attach to personalised financial advice offered by the institutions, and greater flexibility in intra-fund advice.

Although ART does not plan to position itself in the comprehensive advice market, Ms Fuchs does believe the fund is set to play a key role in the democratisation of advice.

“We believe in open architecture advice. We believe advice is a very individual experience,” Ms Fuchs told ifa. 

“Superannuation has had traditionally a very paternalistic approach to advice. You can only come to us and it’s comprehensive advice and we think actually, the way of the future, with that spirit of democratisation is we just give them [consumers] options, so they can consume it how they want to consume it,” she noted.

Ms Fuchs explained that ART will shortly announce its “end-to-end digital advice platform” — encompassing calculators, DIY advice through and human-led intra-fund advice — and is aiming to launch it in the market by the end of next year.

“That [the platform] we believe needs to be able to create a member experience, which is why it’s going to be a single platform,” Ms Fuchs said.

“So, if it gets too hard and you [the member] are doing a DIY experience, you can put your hand up and say ‘can I have an adviser now’ and they screen share and talk to you.”

The head of advice emphasised that ART acknowledges the significance of advisers and intends to incorporate the services of real advisers into its platform offering. At present, ART has 60 advisers providing simple advice to members over the phone.

“The reality is the trustees need to be able to discharge their obligations thoroughly and to do that, comprehensive advice is a big part of that because people will have other income sources, other assets. That’s why comprehensive advice is needed,” Ms Fuchs said.

Despite this, she emphasised that ART is not in favour of vertical integration.

“We can’t scale that, it would cost us a fortune, and it’s not in the spirit of FOFA. It’s vertically integrated and we’re not pro vertical integration in that sense.

“I know a lot of people would say intra-fund advice is vertically integrated, my response to that would be that our intra-fund advice service to members is a member service, it’s not a profit making ... It doesn’t acquire market share, it’s not used to grow, it’s used to serve and to help members retire,” Ms Fuchs said. 

According to her, ART's endorsement of intra-fund advice stems from its goal to offer support to members in line with the original purpose of super.

"Who is helping the woman who is 61 years old, who has been an aged care worked and has $80,000 in her super and she is tired? All she wants is to work out how she can retire and all she's got is her ART account. Where does she go? We should be able to help her in the spirit of what super was set to achieve and that's why we believe in intra-fund advice."

As for the platform’s potential kick-off date, Ms Fuchs said the fund hoped to have it implemented by the end of next year. 

“We’re just working out the sequence of it in line with Michelle Levy.”

ART has experienced rapid expansion in the past year, and now boasts a membership of approximately 2.2 million individuals.