Robo advisers aren’t competitors: Zurich

The adviser’s value proposition is in the human touch and advisers should work with new technology tools instead of viewing them as competitors, says Zurich.


Financial advisers and planners should harness new technology, such as apps, robo-advisors or artificial intelligence because the value they themselves provide for the client lies elsewhere, according to a Zurich white paper.

Zurich’s white paper BusinessFIT: Navigating towards the advice practice of tomorrow, released on Tuesday, said the ‘Augmented ‘Age should be “embraced” by advisers rather than feared.

“The future of financial advice will be bionic – a powerful combination of both humans and robots, working together and augmenting one another to inhabit a brand new consumers pace,” the paper said.

With the adoption of technology in the financial services industry, “the role of an adviser could shift considerably to that of a ‘facilitator’”.

“In this scenario, advisers remain crucial in understanding a client’s experiences, preferences and the subtleties of their long-term goals, while relying on powerful AI tools that use machine intelligence to amplify this data,” the document said.

Successful business models would employ this fusion of both human and AI resources in order to cater to a diverse range of clients with differing needs, some of whom would want to “hand over their entire financial decision-making” to the adviser while others would prefer a more hands-on “do-it-yourself” approach.

The benefit of utilising tools such as artificial intelligence would be the space created for advisers to focus on the “higher value aspects” of their firm, such as growing relationships with clients, networking, and marketing, according to the report.

Commenting on the paper, Zurich Financial Services Australia head of marketing and communications Richard Dunkerley drew upon his own experience with Zurich advisers.

“I can tell you that the majority of advisers can’t break away from the idea that they do a whole bunch of technical stuff, they do a whole bunch of numbers, they think their value add is around understanding products and strategies and that sort of stuff,” Mr Dunkerley said.

“I don’t think they have quite tweaked to the fact that most of [AI] can do that equally, if not better.”

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Moneysoft announces new partnerships

Moneysoft has announced new partnerships with a goals-based advice fintech provider and a data-connecting platform.


In a statement today, fintech provider Moneysoft announced it will integrate its cashflow service with goals-based advice software Investfit.

Investfit is a software that allows advisers to collect and feed information about a client’s financial position into their actuarial goals-based analysis.

Co-founder of Investfit Ed de Salis said, “Combining Moneysoft’s real-time data on client spending patterns with our real-time modelling underpins robust asset and investment recommendations. Integrating the two will save advisers time and reduce manual processes.”

Moneysoft also announced a partnership with data connecting platform Xeppo.

Developed by Adelaide-based firm Opex Consulting, Xeppo connects information from across existing platforms to give advisers a holistic view of their entire client base.

Opex Consulting managing director Paul Campbell said, “The integration with Moneysoft brings in new information about clients’ assets and liabilities. When that’s combined with data from the other systems a practice uses, it gives a complete picture resulting in a stronger ability to understand their clients and provide tailored recommendations.”

Head of technology and operations at Moneysoft Jon Shaw said Moneysoft’s open architecture makes the integration with Investfit and Xeppo possible.

“The financial services sector is undergoing a period of innovation driven by low-cost cloud computing and a broad endorsement of open data principles, including by the Productivity Commission and a lower house government committee,” he said.

“Open data empowers consumers with greater control over their information, helping them drive their financial wellbeing – that’s at the heart of what Moneysoft is all about.”

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Financial advice key to ‘living the dream’: research

Australians who identify as “living the dream” are three times more likely to seek financial advice, research from the FPA has found.


In a statement today, the FPA released the findings of its “Live the Dream” national survey, which looked at 2,635 working age Australians.

The research found that one in four Australians (23 per cent) believe they are ‘definitely’ or ‘mostly’ living the dream. These people are nearly three times more likely to seek the advice of a financial planner (24 per cent) than those who describe themselves as not yet living the dream (9 per cent), the research stated.

The research also showed that 80 per cent of working-age Australians are stressed about money and finances, with one in four indicating acute stress levels.

Gen X and Gen Y are the most stressed about money and finance, and are the generations most likely to struggle with planning, the research stated.

Half of Gen Y (53 per cent) finds planning their life very/somewhat hard.

Meanwhile, 44 per cent of Gen X Australians feel the same way, while Baby Boomers are the most likely to find planning easy to do (25 per cent).

Further, owning a home is no longer a dominant Australian dream – slipping to a distant fourth place in the dream stakes, according to the research.

Most of the measures Australians attribute to “living the dream” in 2017 are linked to personal finance. While 57 per cent believe living the dream means having the lifestyle of their choice, a similar proportion (54 per cent) believe it means having financial freedom and independence.

FPA chief executive Dante De Gori said, “The research reveals a powerful data link between our nation’s happiness and financial planning. It’s my hope we’ll inspire more people with this research and the various stories and insights we’re releasing this Financial Planning Week to seek sound financial advice to unlock their own dreams.”

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Ethical certification for advisers launched

Advisers can now obtain an ‘ethical financial advice’ certification.


In a statement, advice consultancy firm Certainty Advice Group announced it has launched a certification mark for ethical advice — dubbed the ‘Certainty Advice’ mark.

“The mark certifies advisers who adhere to include common approaches: how value is determined for clients, how clients are engaged and re-engaged every year, and how advice is priced without conflict. Being comprehensive and priced on value, it’s different from what most clients have experienced,” Certainty Advice said.

Managing director of Certainty Advice Group Jim Stackpool said, “Since 2005, we have always had a simple objective — consistent and methodical delivery of comprehensive and ethical advice without any real or perceived conflict or incentives. So by creating this new certification mark — called Certainty Advice — we are certifying our approach to not only make it accessible to more advisers, but more Australians.”

Mr Stackpool believes that while the new certification will take some time to take hold in the financial advice world, it will ultimately deliver comprehensive and ethical value for more Australians every year, the statement said.

“It’s not for every adviser, but I do believe this form of financial advice will be more accepted by most Australians by 2030,” Mr Stackpool said

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RegTech the key to reducing adviser bans

Regulatory technology (RegTech) could be a major solution to reducing adviser bans and penalties that occur because of the compliance burden in advice, one policy expert and entrepreneur has said.


Speaking on the latest episode of The ifa Show podcastformer AFA policy chief and co-founder of Advice RegTech Samantha Clarke said RegTech tools will play a major role in preventing adviser bannings and follow-on industry reputational damage by dramatically reducing compliance burdens.

Discussing the attitudes of advisers and licensees towards RegTech, Ms Clarke said, “What I’m hearing from my research with licensees and advisers – particularly the directors and senior members at licensees – is that they don’t want any more advisers banned on the front pages of the papers. It’s not good for advisers, It’s not good for the reputation of the industry, It’s not good for the licensees being named and shamed as a result of these bannings and investigations – so any tool that can help to improve that outcome for them is welcome – that’s what I’m hearing.

“Imagine licensees having the ability to have a dashboard that allows them to see where there is quality advice being produced in their networks and where there’s not.

“RegTech will improve the automation and the span of oversight – predictive analytics and technology can enable where quality human oversight should be focused in a proactive way rather than trying to cover all bases.”

Ms Clarke pointed to the publication of the ASIC Report 515 regarding advice audits, reference checking and breach reporting from the large five licensees. Ms Clarke said $3 billion has been wasted on compliance in the industry.

“[The report] had some really concerning results around oversight,” Ms Clarke said.

“Despite $3 billion being spent on regulatory compliance across seven reforms over the last few years, the results show that only 18 per cent of the advice audits were effective amongst the large licensees.

“With all the money that’s been spent by those licensee trying to get it right, the results are not right. We need to look at things differently and in new and different ways as an industry.”

Ms Clarke said RegTech will drive a more contemporary use of compliance at both the licensee and adviser level.

“I envision something much like when you buy your cereal at the supermarket and you see the heart tick of approval for a healthy cereal. Statements of advice in the future will be more contemporary so that when advice is provided to consumers it comes with a best interest duty tick of approval.

SOAs should also evolve to move away from paper form and incorporate videos and other formats that actually make it easy for clients to understand and engage, Ms Clarke said.

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Increased number of advisers using smart beta

At least 50 per cent of financial professionals are using smart beta strategies in client portfolios with outperformance the biggest draw, followed by lower costs compared with actively managed funds, research from VanEck has stated.


According to VanEck’s second annual smart beta survey, 91 per cent of financial advisers and brokers believe smart beta strategies will outperform or perform in line with active strategies, while just 9 per cent think smart beta would underperform.

Managing director at VanEck Australia Arian Neiron said, “The survey reveals smart beta strategies are quickly gaining traction among investment professionals.

“We are nearing a tipping point where smart beta ETFs will become as prevalent as market cap weighted ETFs given their strong performance and cost advantages compared to active funds.”

Smart beta ETFs combine aspects of active and passive management by tracking indices that deliver a targeted investment outcome. Yet they retain the transparency, liquidity, ease and rules-based approach of market capitalisation based ETFs, VanEck said.

“A clear sign that smart beta is winning backers is that 73 per cent of financial professionals using smart beta are ‘very or extremely satisfied’ and only 1 per cent are unsatisfied,” Mr Neiron said.

“Another sign that smart beta is gaining traction is its broader use by all investment professionals, including advisers working with the big banks. While IFAs were the early adopters of smart beta, aligned advisers are now the fastest growing users.

“Investors are now realising that active funds do not always achieve higher returns than the benchmark and are seeking more cost effective and transparent options to achieve investment objectives.”

The VanEck survey results were based on the responses of over 150 Australian-based financial professionals working in an advisory capacity in Australia.

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