*This article is produced in partnership with BT

Many developed nations have an ageing population and are facing similar challenges to Australia.

In Australia, people are increasingly moving into the retirement phase of life. Over the next 40 years, the number of Australians aged 65 and over will more than double, and the number aged 85 and over will more than triple, according to the Intergenerational Report released by Treasury last year.

It’s expected that, with fewer working Australians able to support retirees, more Australians will be relying on self-funding for their retirement.

These demographic trends mean that education and financial literacy are more important than ever, so that Australians become better engaged in actively managing their finances and building wealth, ideally much earlier than at the cusp of retirement.

Financial advisers play an instrumental role in helping Australians identify their financial needs and plan towards a secure future.

During BT’s study tour in the United Kingdom in 2023, we sought to learn how financial advisers in that part of the world are encouraging people to improve their financial literacy and access financial advice. Comparisons between Australia and the UK are helpful, as both have an ageing population, a strong financial advice industry and a superannuation or pensions system.

Client segmentation and technology

Currently we have a situation where advice is not accessible to all segments of the Australian population, across the range of income levels and demographic characteristics. This means that among those missing out are many people in segments who may well benefit significantly from financial advice: Millennials and Gen Zs saving for their first home, young families impacted by rising interest rates and cost of living pressures, and older people retiring with modest savings.

Savvy advice practices in the UK are segmenting their existing and potential client base and using technology to become more efficient in servicing clients.

While high net worth clients tend to require a human touch, technology-based solutions that can reduce the cost to serve can be suitable for mass affluent and other segments. Furthermore, amongst younger clients, tech-enabled service is expected.

In the UK a new crop of advice businesses has been emerging in recent years – digital-enabled advisers – companies that begin with new technology, and then build their advice businesses on top. There are now some very capable technology advisers in the UK market catering to the mass affluent and younger investors.

One UK firm that we met with services a range of client segments has developed an ‘advice assistant’ that leverages artificial intelligence. Using a powerful customer relationship management system, the company can pull together information on a customer and create an automatic advice recommendation which then goes to a financial adviser for review.

Getting social strategically

Many Australian financial advisers have a presence on social media and might be interested in the strategies UK advisers are using to make the most impact on socials and other online channels.

At one advice practice, their marketing funnel is divided into three levels:

  • Awareness – answering questions and informing an audience primarily with advertisements, social media and email;
  • Interest – offering solutions and making comparisons, including guides, presentation slides and bespoke websites; and
  • Conversion – involving benchmark reports, tax health checks and valuation reports.

This advice business segments clients (and potential clients) based on data acquired from digital campaigns, into backgrounds, hobbies and interests and expectations. It then uses that information when marketing to individuals.

Another practice has developed a social media site to help provide financial education to as many young people as possible to improve financial understanding. Their content includes basic financial literacy concepts, and anonymous profiles of individuals explaining their incomes, savings plans and goals. Viewers can align to those profiles and measure themselves against them.

Superannuation as an entry point

The combination of super, voluntary savings and age pension, makes our pensions system one of the best in the world – and in fact UK policymakers are looking to the Australian system as part of a continued reform of the UK pensions system.

In comparison with the UK, Australia’s super system has been in place for around three times as long (approximately 30 versus 10 years), meaning that Australians are seeing the benefits of their accumulated savings earlier than their UK counterparts.

Whilst our superannuation system might be the envy of other nations, amongst younger Australians, there is low engagement in relation to their superannuation savings.

While super and tax strategies can be complex, financial advisers are well placed to help unpack these – they can start conversations on saving and investing, using super as an entry point with potential clients. For example, younger Australians saving for their first home might be interested in the currently underutilised First Home Super Saver Scheme.

The BT UK study tour demonstrates that advisers in Australia and Britain can learn from each other and take the knowledge of one geography and apply it back home. It also shows that the two cohorts have plenty in common. Comparisons such as this also help us appreciate what’s great about our own market and remind us to play to our strengths.

For more insights from the UK study tour, visit BT Academy or speak to your BT BDM.

Jason Brown is BT’s head of platforms distribution.

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