The chief executive of industry innovator HUB24, Andrew Alcock, says that advisers don’t need to fear technological disruption and robo-advice, because they will drive greater client engagement.
Alcock says that technology is providing unprecedented opportunities for advisers to create broader and more efficient client-lead funnels, as well as tools that will lead to more engaged clients.
“I really think this is an amazing time for advisers,” he says. “Innovation is disrupting our industry at all levels and there is an incredible opportunity for advisers to leverage and benefit from that.”
Alcock says he doesn’t see robo-advice as a threat to advisers, because clients will still want a personal relationship with the adviser.
HUB24 is “model agnostic”, Alcock says, but the company is working with a number of clients who are moving to provide robo-advice, with HUB24 providing backend implementation and administration.
Alcock says robo-advice will allow advisers to segment their client base and build new relationships.
But it will also drive new business to clients.
Attract new people to advice
He says just 20 to 25 per cent of Australians have a relationship with an adviser, but robo-advice would help attract new people to advice. Over time they will seek professional advice from an adviser, which will drive greater adoption.
Robo-advice will also free up advisers to provide deeper and more high-level advice to clients.
“It changes the conversation from ‘What’s going on in my portfolio?’ to ‘What do I need to do strategically to meet my goals?’,” Alcock says.
“I don’t think it will radically alter the state of play in the short term.”
But he says that while technology is an opportunity for advisers, it can also be a threat to industry players, particularly those operating with legacy systems, who don’t leverage its benefits to drive scale benefits and lower fees.
“If you’re not that scalable you have to charge more and your fees are higher,” he says. “That’s a threat to people who can’t do things as efficiently.”
HUB24, along with netwealth, have scored highly in the Investment Trends 2015 Platform Report. Netwealth topped the table in terms of overall platform functionality, with HUB24 coming in in third place behind Colonial First State’s FirstWrap.
Alcock says HUB24, which is ASX listed, is continuing to innovate. Late last year it launched international managed portfolios on its platform, which allows investors to directly own internationally listed companies in more than 15 global markets across North America, Europe and Asia, via professionally managed portfolios.
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Benefits of direct ownership
The offer provides the benefits of direct international share ownership, such as transparency of ownership, direct dividend cash flow and tax efficiencies, at an affordable cost, Alcock says.
“Australian investors are often heavily weighted towards Australian equities. Direct investment in international equities can be difficult and expensive,” he says.
“Those that want global exposure are typically invested in exchange-traded funds or managed funds. Now investors can easily and affordably directly own such well-known companies as Colgate, Nestle, Toyota, Visa, Microsoft and Apple via the international managed portfolios on our market-leading investment platform.”
