Speaking on an upcoming episode of the ifa podcast, founder and chief executive of Advice Intelligence, Jacqui Henderson, said that the adoption of digital advice still has a “way to go”.
Specifically, she highlighted the distinction between digital tools and digital advice, with the former said to have been more widely adopted. The latter, comparatively, has been received with far more hesitancy.
“The industry has a view that digital advice isn’t quite there, whereas it actually is,” she explained.
According to Ms Henderson, this has taken a back seat while advisers have grappled with increasing consumer demand.
“At the moment, they’re just in their cycle of being busy, trying to deliver to their clients, and not really taking the time out to really look at the technology available to them and start testing the waters. So, I think there’s still a bit of complacency around continuing to do things the same way and not adopting this new world that’s emerging,” Ms Henderson said.
However, she highlighted that with the impending wealth transfer, advisers need to make time to acquaint themselves with digital advice.
“I think we’ve got that intergenerational wealth transfer happening, we’ve got advisory firms that are servicing their older clients and that generation of wealth is going to transfer through to their children. And being able to deliver a service offering that can target both segments, I think that’s really key,” she said.
“Advisory firms need to look at digital within their business model and how it can redefine their actual business model, their service model, so that they can service scale, but also service the various segments if they want to diversify, in terms of the target markets that they would like to start servicing.”
Having run a wealth management firm, Ms Henderson said she has seen, firsthand, the industry’s adoption of digital advice struggle to catch up to consumers, who are becoming increasingly comfortable with incorporating technology into their everyday lives.
“I saw this gap between the way consumers were adopting technology and wanting to consume financial advice, and the way the industry was delivering financial advice … we really needed to start bridging that gap.”
However, she conceded that there’s no “silver bullet” digital advice platform, and encouraged advisers who feel as though they have too many tools at their disposal to narrow down their tech stack and embrace an open framework.
“The industry is very complex and having that silver bullet platform that does everything, simply does not exist. Which is why an open architecture, open API (application programming interface) for your technology provider is really important, so that you can connect up the various tools that you want,” she concluded.
Ms Henderson and Advice Intelligence are a part of establishing the recently announced Australian Digital Advice Association (ADAA), aimed at advocating for change in financial advice regulation and improving the delivery of digital advice solutions.
The association’s founders — fund manager abrdn and firms Ignition Advice, moneyGPS, and Advice Intelligence — will join Adviser Innovation’s editor, Maja Garaca Djurdjevic, on a panel at this year’s Adviser Innovation Summit to discuss their goals, and how a unified and coordinated voice for digital providers can revolutionise the industry.
To secure your ticket to the Adviser Innovation Summit 2023, click here.
