What does the future of advice look like? A part of marketing is to see what markets might look like in the future and ready your business for those eventualities. In late 2016 I asked LinkedIn’s XY Adviser group to participate in a short survey about what they see in the future of financial planning in 2017 and beyond. Here are the issues they see.
- Legislative change to increase advice accessibility. With increasing regulatory requirements, the cost to provide advice becomes prohibitive for many Australians who need it most. Respondents felt that personal advice needs to be more affordable, and particularly simplification of advice procedures for clients with small balances or very simple affairs.
- Separation of advice and product to be finally realised. Respondents want to see the removal of all commission from all financial products (including wealth, insurance, banking, and general insurance). Respondents felt that as long as there is a reward for establishing a new product for clients, clients will not get advice in their best interest. Clearly, there were no respondents working for banks here.
- Dealer groups increase their focus on strategy support. The value of advice is highly dependent on the quality of the strategy delivered to the client. It’s not surprising then that the creative and technical component of strategy development is being seen as more valuable in the future by those giving advice in the future.
- Robo Advice is properly monitored. Respondents were skeptical about what Robo Advice would actually deliver and if it’s not actually just a sales pathway disguised as financial advice. Overseas experiences of Robo Advice have had many issues around quality and complaint resolution. Respondents providing Personal Advice want Robo Advice to be held to the same high standard they maintain.
- Property Agents held to account. With housing affordability increasingly out of reach of many Australians, particularly X&Y generations, it’s perhaps not surprising to see regulation of the property industry as an issue. Property agents often use the word investment freely, but often don’t have any qualifications or fiduciary obligation for the advice they give.
It’s interesting to see that there’s a mix of industry and environmental factors raised by this survey respondents. What’s clear is that they have a passion for providing good advice and want to see an industry that is properly regulated to ensure clients receive the best advice possible.
Thanks to those who participated. I hope this inspires you to proactively create the future for the industry and the business that you’d like to see.