Much of the focus of digital advice has been on how the larger advice institutions will implement it, but a smaller firm has taken the plunge on investing in a digital solution to help bridge the advice gap.
Last week, Insignia announced it was partnering with Israeli fintech Personetics to help it service more clients.
This week, AZ Sestante service, Sestante Invest has launched six investment portfolios based on risk profiles and ESG considerations.
This digital advice model includes regular updates explaining the reasoning behind portfolio management decisions, and financial literacy and wellbeing content.
AZ Sestante head of distribution and implemented consulting Andrew Davies said the aim was to increase services for clients who are not able to afford higher cost financial advice.
“Our client firms are dealing with issues that are consistent across the Australian financial advice landscape: as the cost of delivering ongoing personal financial advice has shot up and large numbers of advisers have left the industry in recent years, it means that increasing numbers of people are priced out of this service – what is generally referred to as the ‘advice gap’.”
The minimum investment on the service is $25,000 which is underpinned by Melbourne-based fintech investment platform OpenInvest.
OpenInvest co-founder Andrew Varlamos said wealth management firms are attracted to the fact that young investors not only obtain a professionally managed portfolio but are also able to learn about investing through the app.
“With an estimated $1 trillion in wealth moving between generations over the next decade, it’s logical for progressive wealth management firms to be reaching out to help the next generation now – not after they have built their wealth to what a firm might traditionally have regarded as their minimum threshold,” Varlamos said.
