While the profession clamours for regulatory levers that would make advice simpler and less costly to produce, the industry still has to contend with technology bureaucracy and the excessive cost it places on businesses.
While much of the Professional Planner Advice Policy Summit discussed how to perfect the regulatory settings in place, one session heard that despite the presumed regulatory relief of simplified advice documentation and disclosure due to the Delivering Better Financial Outcomes reforms, there was other pain points that law reform couldn’t solve.
During a table discussion in the session, conducted under Chatham House rules which meant the participants wouldn’t be attributed, one adviser told the room that producing Statements of Advice was not the biggest cost to practices, but it was instead the implementation of advice.
“We’ve costed this up in our practice for the lower value clients, and the single biggest cost in terms of effort of that advice has nothing to do with the SOA, and it is all about implementation,” the adviser said.
“It costs us a fortune to interact with the different platforms, the legacy products. I really want to make sure we don’t put too much singular effort into that SOA.
“To be honest, if you wanted to transform our business, if it got much easier to interact and implement the advice we could bring our costs way down.”
The participant suggested if it was easier to interact with the new technology, costs would decrease significantly.
HUB24 chief executive and managing director Andrew Alcock said HUB was looking at how to make its platform “easier and better and safer so advisers can be more productive”.
“So that’s through engagement tools, technology, data interfaces, and compliance and prevention,” Alcock said.
No standards
The panel heard there is a lack of standardisation across the platforms which affects the efficiency of implementing new technology.
Tanya Seale, group executive technology solutions for Centrepoint Alliance group which also offers its own platform, said a frustration for advisers is that while platforms share similarities, they’re all still slightly different.
“Everyone has their own consent form,” Seale said as an example.
“It’s slightly different. It’s processed differently. How can we get the process more efficient from the start, from the advice end, right through to the platform?”
Alcock said HUB’s approach was to use any consent form, rather than restrict it to their own or wait for the industry to do so.
But beyond fee consent, Paul Moran, an adviser and principal of Moran Partners who also runs software platform iFactFind, said there was no standardisation or uniform approach on reporting across platforms.
“Every single platform has a different way of reporting, and they changed the reporting process without letting people know,” Moran said.
“[Regarding] a platform reporting point of view, if there was a uniform approach, so you’d have one single set of, effectively, APIs [application programming interface], you could plug into different platforms. That’d be great, but it doesn’t work that way.”
Moran said as a result, people “revert back to logging into HUB24 to get HUB’s report, logging into Centrepoint to get Centrepoint’s [report]”.
‘Adviser inertia’
With professional advisers already struggling to manage multiple systems in their practices there can often be low appetite to experiment and add another service to the mix.
Moran said the biggest hurdle the industry was facing is “adviser inertia” to new technology.
“There is a big, hairy, audacious incumbent in technology and advice and that often I feel restricts the ability to engage with innovation,” Moran said.
He said that after creating iFactFind he found more success in Ireland than Australia as Ireland’s market were much more willing test new software. In Australia, advice businesses are much more cautious and prefer to trial multiple new products before adopting. Consequently, he said “it’s a very slow process to get new innovation coming through”.
“Advisers are very slow to adopt,” Moran said. “They want to try it for a year before they want to come into it.”
Former Insignia Financial CEO Renato Mota said there was huge potential for innovation thanks to Michelle Levy’s recommendations in the Quality of Advice Review report, which he described as the “playbook” the advice industry should be following.
But despite having stepped away from the industry for almost a year, he was surprised little progress had been made.
“Having unplugged myself from the industry for 12 months and sort of re-plugging myself in now, [it] feels like we’ve been in suspended animation, which is the piece that disappoints me the most,” Mota said.
He described the slow progress of innovation since Levy’s recommendations as “bitterly disappointing”.
‘System of plagiarism’
The role of artificial intelligence in tech platforms is ever-growing with most platforms already having implemented it to some extent.
Seale said Centrepoint was “up to about 60, 70 per cent of our network now using AI tools to help with adviser meetings”.
Both Seale and Mota said that while AI is extremely useful, it is important to make sure it’s being used safely and with proper protection for existing data.
“[AI] will be pervasive in every sector of the economy,” Mota said.
“We owe a duty to make sure it’s used effectively, efficiently, safely, for the benefit of our clients, 100 per cent, but the sooner we get on their journey, the sooner we’ll actually learn more about it and actually deliver the outcome.”
Mota said he thinks AI will “transform the industry for the better” and will improve the accessibility and affordability of financial advice.
However, Moran described AI as “a system of plagiarism that’s a super fast Google search” but admitted they use ChatGPT to help advisers.
“I don’t see it as science fiction,” Moran said.
“Personally, we use it, don’t get me wrong, but it’s not artificial. It’s not intelligent. It’s a super fast Google search that scours the internet for things.”
