The architect of the Future of Financial Advice (FoFA) reforms, Bernie Ripoll, has joined the board of online advice business Map My Plan.
The former Minister for Financial Services and Superannuation and chair of the Parliamentary Joint Committee Inquiry into Financial Products and Services in Australia, will become a director on June 1 of the business founded by former financial planner Paul Feeney.
Map My Plan sets itself apart from other so-called “robo-advice” services by offering a pure advice service, with no link to product sales – be it investment, risk or otherwise. Ripoll says the clear separation of product and advice was a key attraction of the business.
“I have spent many years working in and around financial services,” Ripoll says.
“I love the sector; I believe in it; and I think it does a fantastic job. I want to stay part of the sector and Map My Plan was a really good fit. It fits in with my own beliefs and values in terms of financial advice, and I think it’s a really good, sound product.”
Joining the board gives Ripoll an opportunity to work with Feeney, whom he met at university.
“We studied at university together but we took very different paths,” Ripoll says.
“He’s an entrepreneur and a start-up guy, and he gets things done. For many years we have talked about ways we could make a really positive contribution to the sector. Map My Plan is my contribution.”
Never linked to product
Feeney was a private banker at Credit Suisse looking after ultra high net worth individuals, and before that was a senior financial consultant at Perpetual. He says Map My Plan is designed to offer relatively straightforward advice to the estimated 80 per cent of Australians – or 7.5 million households – who currently receive no advice at all. But the advice will never be linked to product.
“When you’re inside [the financial planning industry] you can see right away – I’m painting with a broad brush and there’s always exceptions – that when advice is being used as a means to justify selling a product, the end user can never be 100 per cent sure that the advice is right for them instead of being right for the firm, or for the adviser sitting across from them,” Feeney says.
“If you look at reasons people do not use financial advice, going back five or six years ago to ASIC’s big survey, it’s intimidating, it’s confusing, it’s costly. Do I get value? And the last big one is trust, pure and simple.
“As a result, you’re always seeing only one in five Australians access advice. I think it’s the other way around – I think the industry only offers advice to probably one in four Australians, because they can’t figure out how to make money out of the rest of them.”
Feeney says a result is that almost 7.5 million households in Australia do not “get any advice at all”.
It’s not rocket science
“Financial planning, outside of probably the top 5 per cent [of clients] isn’t complicated, it’s not rocket science. When you get up to the big end, yes, OK, it’s complicated, but that’s 5 to 10 per cent of the population,” Feeney says.
“For the rest of us it’s not a complicated process. There’s a lot of variables, but as soon as you take in six data points of an individual, half of the actual variables are no longer relevant.”
In a statement, Ripoll said that “fintech is clearly having a transformative effect on financial services and the way the industry meets customer needs”.
“Map My Plan is unique in that it provides advice without selling any financial products – it just focuses on advice which will help people make well-informed financial decisions throughout their life and improve their financial fitness,” he said.
