In a move aimed at solving the unmet advice needs of members on its FirstChoice platform, Colonial First State has partnered with digital advice provider Otivo.
While the deal was flagged publicly in September, CFS announced on Wednesday morning a partnership with digital advice provider Otivo to deliver a personalised digital advice solution for CFS FirstChoice members who do not currently have a financial adviser.
When the Hayne royal commission outlawed grandfathered commissions a significant number of clients were either not converted to ongoing service agreements or saw their advisers quit the industry.
Otivo designed the advice tool specifically for CFS members, to provide personalised digital advice in relation to their CFS FirstChoice investment options, contribution strategies and insurance arrangements, at a cost of $88 a year deducted from their super accounts.
The option to access digital advice will provide a solution for the “thousands of calls a month” to CFS from members who want help and guidance that CFS Superannuation chief executive Kelly Power has bemoaned and long believed indicate there is sufficient demand to justify introducing interactive digital tools.
Power told Professional Planner in a statement the deal was designed to complement the spectrum of advice and guidance that is already available.
“The key drivers for this arrangement are responding to member demand and interest in receiving more assistance, including digitally,” Power said.
Crucially, Otivo has its own AFSL, something that CFS lacks and which Power flagged in an episode of the Professional Planner Shape of Advice podcast earlier this year.
“For us, we don’t have an advice license so we’re completely relying on third party partnerships and so that could be with digital advice providers with their own AFSL, through to independent advisers, through to other partnerships that we could put in place,” Power told the podcast.
“Really for us, it’s about how do you get the cost down, the cost of the provision of advice driven down, across all relevant providers so they can provide bespoke, individual, answer questions, whatever the situation is, but to be able to do that at a very cost-effective and affordable way for those type of members.”
Wednesday’s announcement acknowledged that although new technology and digital tools will have a role to play, it’s not for every member, which is why it’s only one part of the platform’s overall advice strategy.
CFS wanted to cater for the spectrum of advice needs, from those who need sophisticated personal advice, to those who only have a few questions about choosing the right investment or to get on track for a better retirement.
Otivo’s standard pricing for those who want to sign up directly to the service is $165, but CFS members who access the service will receive 12 months unlimited access to Otivo’s digital advice, after which they will need to renew if they wish to continue accessing the service.
“During the 12-month term, the member can revisit the advice modules available on an unlimited basis so they can amend their details should their circumstances change,” Power said.
The service will be free to CFS FirstChoice members until 31 October 2024. “After the expiry of this free period, members will be offered this service at a cost of $88 per annum,” Power said.
The deal will strictly be for FirstChoice only, with the new Edge platform designed to cater to advised clients.
“Edge has been primarily designed as an advised superannuation and investment platform, supporting members with more sophisticated needs, whereas our FirstChoice platform has a range of products including direct superannuation and investment offers that are available to a wide range of members and investors,” Power said.
