A winner of a scholarship to study at Harvard in the US has his sights set on nothing less than a revolution in how financial planning services are delivered.
A 2015 Menzies Scholar for the Commonwealth of Australia, Simon Malian, is studying a Master of Science, majoring in computational science and engineering. He plans to use his experiences in the Australian banking and financial planning sector to develop advanced techniques for online delivery of financial planning to the mass-affluent market.
Malian is an unusual recipient of a scholarship that more often is awarded to an individual studying in an area of public policy, such as education or health.
He will be working in the Harvard Innovation Lab (i-Lab), which was set up in November 2011 and is located near the Harvard Business School. Facebook founder and Harvard alumnus Mark Zuckerberg reportedly described the i-Lab as resembling a slice of California – the very place that Harvard is competing with to retain its best and brightest and to assist them in converting concepts into commercially viable products and services.
Very different
“I’ll be creating a financial planning service, and it’s going to be very different from anything on the market so far,” Malian says.
“Mine won’t provide any actual advice; I want to take the financial planning text books and theory and provide information in a really innovative way, and let [consumers] make choices. Through making those choices they can create their own financial plan.”
The approach, Malian says, is to provide information in a way that reflects “this is what a financial planner would do, if you asked them these questions”.
He says it addresses the disquiet that some consumers have expressed about the financial planning process.
“A lot of consumers sometimes feel a bit concerned,” he says.
“A lot of advice services have this ‘black box’ where advisers are making decisions and consumers are concerned about whether the decision is being made in their best interests.”
Malian says the online service will not be useful or appealing to everyone.
“It will be someone who is maybe Generation Y, or someone like that, who has a professional career and is interested in how real estate investment, or how superannuation works,” he says.
Experimentation
Malian says he will use his time at i-Lab to essentially experiment with various iterations of his concept. Previous experience has taught him that backing for an idea is hard to come by, but backing for something that exists and works is much easier to secure.
“It may work out, or it may not work out,” he says.
“We will see if people in the market agree with me.”
Malian previously worked with Westpac where he develop systems to help the bank identify its most profitable customers. He also worked at Commonwealth Private Bank, which served as an introduction to financial planning, before moving to Commonwealth Financial Planning (CFPL).
Malian says he moved there before CFPL’s enforceable undertaking was announced, and his job was to create risk management systems to help the business spot potentially high-risk financial planners.
“They had thousands of advisers and they saw the need to make sure their risk management staff were focused on the most challenging or concerning of them,” Malian says.
“We were looking at various pieces of information – one of them was sales stats, so if someone was the worst performer and went from writing no business to millions of dollars of business a month, that was one criteria. Then we would look to see what had made such a dramatic change.”
Flag an adviser
Another criteria was the average risk profile of clients, by age. It would flag an adviser if he or she had a group of clients of a similar age same age but with a very different risk profile from other advisers across the network.
Malian says he left the bank to join the NBN Co, where he continued to learn about the latest technology.
The Menzies Foundation typically awards between one and three scholarships a year. Foundation chief executive officer Sarah Hardy says Malian’s project was a stand-out and demonstrated a clear public-interest benefit.
“It’s a very prestigious scholarship because the criteria is for a very high-achieving Australian resident or citizen who has excelled already in their undergraduate studies in Australia,” she says.
“But just as important is their ability to contribute to the Australian community in other ways than academia.
“Why they want to study at Harvard is because most of the time the courses are exemplary and not offered in Australia, and will take their career to another level.”
Really unique
Hardy says that in addition to Malian’s interest in financial planning he is working on “developing an algorithm to benefit the charitable sector…that is really unique”.
“We haven’t seen that attempted before,” she says.
“His creativity and lateral thinking to apply his know-how to the broad community was really appealing.”
Malian was a state finalist in the 2007 Young Australian of the Year awards for his work with not-for-profit organisations, which is conducted through the Malian Foundation. He has a degree in information technology from the University of Technology, Sydney; and a master’s degree in commerce from the University of Sydney.
