The launch of an online general advice tool answers calls for greater access to low-cost advice for consumers, writes Kristen Paech.
Despite various and continuing attempts by industry and government, financial advice remains a largely untapped resource.
A combination of regulatory changes, cost and compliance has made it exceedingly difficult for planners to provide low-cost advice options to consumers, leaving an overwhelming portion of the population bereft of guidance on their financial future.
A new platform launched in October by invisic, a sister company to WealthPoint Australia, aims to fill this gap by increasing the accessibility and affordability of advice. The first service on the platform, called invisic- Connect, is “Ask Us”.
The tool enables customers and prospects of financial planners, dealer groups, superannuation funds and banks to ask questions online and interact with contact centre agents or back-office staff via the Internet.
Mike Giles, chief executive officer of Wealth- Point, says at $49 per month for a single user, the platform offers an even lower cost per interaction model than phone-based advice.
“Face-to-face advice is expensive to give and to receive, which makes it something that really only the top 10 or 15 per cent of the market can afford,” he says.
“We know the market needs lower-cost options to interact with advisory services, and that means phone and Web channels. We see a broad spectrum of players stepping into that; individual adviser groups that want the channel for beginning a relationship with a customer – because a lot of relationships start with just asking questions – all the way through to product manufacturers, who really need to open up that channel because there are a certain group of consumers that want to interact that way.”
Giles admits market readiness for online full-service financial advice is yet to mature, but believes there is a burning need for low-cost, online, simple “questions and answers”.
“We talk about the rise of the advice factory, and it’s pretty early days in the market for low-cost advice, because groups have to be geared for it, and today’s advisers are really geared towards being able to [provide] only face-to-face [advice],” he says.
“We see that the way to lower the cost for the advisers as well is to work out whether they can service the customers early in the chain and begin a relationship with them.”
Invisic uses the same compliance-based Web 2.0 technology as WealthPoint’s full-service online advice and financial planning services, used by ING in Asia.
Giles says the compliance tracking, bank-grade security, customer management, fact-find flexibility and low-cost hosted infrastructure means invisic can grow and develop further as online advice services, like online financial health checks, become more mainstream.
“Even general advice is tricky in financial services, so we’ve been working on this for a couple of years, bending our traditional adviser platform into a more consumer-facing platform,” he says.
“We initially overlooked just the general advice model and went straight to trying to build super health checks and offer limited advice. We realise it’s still early for that market because nobody has a store of advisers in the back office ready to answer those questions yet, but they do have people who can answer questions at the beginning of that journey, which is general advice.”
The provision of online general advice is an obvious evolution for the planning industry, as consumers rely increasingly on the Internet for their day-to-day needs. Giles believes simple, Web-based advice will especially appeal to Generation Y, offering planners an inroad into that market.
“If your only choice is going into the branch or making an appointment, which it is today, then that doesn’t suit a lot of people, particularly busy people,” he says.
“Nobody likes sitting at the end of call centres [either], so that leaves the Web as a good option.”
He adds: “It’s obviously not for the whole market, but there is a growing chunk of people who do their homework online. The consumer benefits are mainly timing and accessibility, and for a lot of people it’s a lot less threatening to do this online. I know that particularly in the younger generations, Generation Y, they’re never going to call anybody or go into a branch, they only do things online.”
Unlike online calculators, which simply spin out numbers based on the data keyed in by the consumer, the Ask Us tool is interactive.
“For the consumer it’s like having more ways to access an institution,” Giles says.
“Whether you are a financial adviser group, superannuation company or bank, you’ve got to provide more ways and more levels of access for your customers to be able to get to you while keeping the cost down, because making an appointment to see an adviser is an expensive process for both parties, and is not always necessary.”
