Interest in digital advice is at its peak, but whether that results in further take-up by customers is not yet evident according to research from AMP and KPMG.
The ‘Digital Financial Advice Market Scan’ report seeks to help the development of digital advice technology and also provides a landscape of the different providers.
“The interest in [digital] engagement and financial advice solutions in Australia appears to be at a peak, from superannuation funds through to financial institutions such as insurers, banks, asset managers, platform providers and financial planning firms,” the report said.
“Whether the interest results in successful uptake of digital financial advice solutions by enterprises, and in turn, customers, is not yet evident.”
The research found customers will embrace digital financial advice in the same way that they have “embraced online shopping and online banking”.
“Customers are increasingly buying financial services online, as evidenced through Covid, with 29 per cent of Australians seeking financial advice,” the report said.
“People will access help when they need it most. Data analytics should be deployed to identify customer needs, timing, and context to optimise success, and provide customers with options as to how they might solve their particular financial concern.”
The report referred to previous KPMG research conducted in partnership with the Financial Services Council which found consumers believed financial advice should cost under $340. It said digital advice can help serve mass market clients that don’t have the need or means to pay for comprehensive, holistic advice.
“Introducing digital financial advice will reduce the cost, and improve financial capability, but it is not the ‘silver bullet’ that will solve all financial literacy issues,” the report said. “This needs to be part of a broader engagement and marketing strategy.”
The report found 44 per cent of current financial advisers offer a “hybrid or flexible implementation model” for digital advice.