Billionaire fund manager Kerr Neilson has strongly backed the future of Australia’s financial advice industry saying it has a vital role in filling a financial knowledge gap, and that there is no chance robo-advice will threaten the industry’s viability.
The Platinum Asset Management founder told a financial planning scholarship award gathering at Brisbane’s Griffith University on Tuesday that there was a serious gap in Australians’ financial knowledge. “That gap can be filled by good planners,” he said.
Neilson said it was a mere “hope” that public education programs can boost general financial literacy across the country.
“The whole idea of educating the public is dangerous,” he said. “Many people need very close help. Most people don’t have the mentality to protect their wealth and they need help, they need counselling.
“To get people to hold themselves together when they’re under fear is not easy. That’s where a good adviser is worth their weight in gold.”
Neilson also backed the role of advisers in the face of a threat from automated robo-advice. He said there was “no possibility” of advisers being threatened with extinction.
While robo-advice would provide mass-market McDonald’s-like advice, he said there would still be lots of room for bespoke advice for more sophisticated investors.
Neilson said the financial advice industry was “really moving along very nicely” towards becoming a profession, and raising education standards of planners was vital in that move.
“It all starts with education at the young, undergraduate level,” he said.
Personally presented
Neilson (on the left in the picture) personally presented $15,000 scholarships to four Griffith University students majoring in financial planning. The scholarships are part of a program of scholarships across five Australian universities. In addition to the cash grant, the recipients can also apply for one month of paid work experience at Platinum’s Sydney office.
Platinum awarded two scholarships to Aaron Elkhishin and Paul Travis; the Neilsen Foundation awarded two scholarships to Tyrone Alderson and Layla Meyer.
Neilson said Platinum was committed to supporting the development of financial planning as a profession, which started at the undergraduate level. “We’re simply trying to get more dedicated helpers to the public,” he said.
Neilson said that financial planning will get “better and better” as a career option for young Australians, with new ranks forming to take over from ageing advisers.
But he said becoming a professional planner required dedicated study across a number of areas including asset classes, government issues and practice management.
As the industry moves towards a profession, undergraduate education has become vital in raising educational standards, but also in creating a pathway for young people into the profession.
Serious about education, professional standards
Professor Mark Brimble, who heads finance and financial planning at Griffith, says the Platinum scholarship highlights that there are industry players “who are really serious about education outcomes and professional standards, and who are willing to put a lot of money on the line to support that outcome”.
Brimble (on the right in the picture) says undergraduate education is vital in providing a pool of talent for employers, but also in highlighting financial advice as a potential career for students.
“It’s a growth industry, and more Australians are going to need more advice as we move forward,” he says. “With an ageing [adviser] workforce there is a need for more adviser numbers coming through. We’re going to need a bigger pool of quality talent coming into the industry.”
