Why hybrid advice is the future of financial advice
In previous years, there seemed to be a definitive sense within the financial services community that robo-advice was going to be the future of financial advice here in Australia, but what we saw was this idea fall short of expectations.
At intelliflo, we believe that digital advice technology coupled with an experienced and qualified human adviser offers the most effective and engaging means of offering financial advice.
What is hybrid advice and why is it important?
Hybrid advice offers a modern digital solution that uses aspects of traditional advice and elements of modern technology to automate labour intensive services without removing the human connection provided by an adviser. Above all, this technology provides the client with greater visibility and transparency while allowing them to access the time cost savings of more efficient advisers.
In Australia, the advice gap has shown few signs of narrowing. Research from Investment Trends has shown that 12.4 million Australians have unmet advice needs, a figure that is only likely to grow as cost of living pressures continue to rise across the nation. As we continue to build our footprint in the Australian market, we remain committed to ensuring that more Australians have access to quality and affordable financial advice.
The benefits of hybrid advice?
intelliflo’s eAdviser Index measures customers’ business metrics against their use of intelliflo office. The most recent research showed that “champions”, who maximise their use of technology, generated 54 per cent more revenue and 76 per cent more ongoing revenue per adviser. This signifies the ability for hybrid advice to reduce costs by promoting automating labour-intensive services.
Within intelliflo office, we are continuing to see consumers increasing their digital literacy skills, through the use of innovative digital solutions such as our secure client portal and video conferencing capabilities. This is maximising the value of advice while creating a more engaging experience for clients.
At the core of our value proposition is the desire to create a better experience for clients, that increases affordability through digitalisation. Whether it be the pre-population of client information or the ability to access real-time data feeds within a hybrid advice solution, reducing manual labour-intensive tasks is driving this vision.
The shortcomings of robo and traditional advice
While on paper the robo approach may appear to provide an effective and affordable solution, automation cannot provide the sense of trust, security, understanding and peace of mind that we receive from a financial adviser. Within the sector, we are seeing that growth for robo providers is slow, patient capital is required to support robo-advice providers and there is not a viable number of people who are happy to trust their finances with an algorithm. It is for these reasons that we see the future of robo advice as simply not feasible.
At the same time, the industry lacks the capacity to significantly broaden its reach using traditional methods only. As the usage of digital tools and processes continues to cement its position as the standard for industry practice, it will be difficult for advisers using traditional methods to offer a service that is comparatively affordable, engaging and fully transparent.
The future of financial advice in Australia
At intelliflo, we believe that hybrid advice will go a long way in bridging the advice gap, whilst also working to alleviate the stigma that advice is not affordable. As an industry, we need to encourage more people to access advice and making it more affordable is the key to doing so. Improved technology usage is the future of advice in Australia, and it is here to stay.