Rather than focusing on fintech as a threat, advisers should embrace this technology.
A lot of new firms trying to engage clients are robo-advisers, which, it is argued, can be a threat to traditional advisers, especially those focused on investments, says ifa editor Linda Santacruz.
Rather than focusing on the threat, Fortify Financial managing director Glen James, speaking at a recent ifa round table discussion of industry experts, says advisers need to embrace this technology, pointing out that it’s scalability means it can produce great efficiencies in an advice business.
“You’ll just be set apart from everybody else. And I believe if you’re not, probably in the next three years, really getting on this curve, you might have a really hard time attracting and maintaining clients.”
A lot of customers want to engage with advice digitally, says ANZ Wealth insurance managing director Gavin Pearce. But even when that’s built into the advice model, a large portion of advice given will still be human-led, simply supported by technologies, he adds.
Association of Financial Advisers national president Deborah Kent agrees, saying fintech is an opportunity for advisers, but cannot replace the important human element, at least in the foreseeable future.
“If we can integrate the fintech technology into our businesses, so we can provide advice to consumers with low cost, I think we’re starting to get that middle ground — the ones that are not getting advice.”
She warns advisers against being frightened of it, saying a key challenge is that while banks have embraced fintech, licensees have not. Kent identifies simple advice businesses as the most susceptible to competition from fintech, and says they should consider broadening their scope to a wider range of financial solutions.
That broadening of the advice “eco-system” is the future of the sector, says ANZ Wealth managing director Alexis George. And it is something that technology is enabling, so advisers are positioned to give an holistic answer to their clients’ concerns.
Echoing the holistic, scalable and efficient attributes of new technology, Orion Financial Group director Sacha Loutkovsky says fintech is “100 per cent an opportunity” and is a very useful tool to scale advice from the simple to the complex.