'Strategic advice' the model of the future

The rise of robo-advisers coupled with lower-cost financial advice offered through industry super funds mean traditional advice models need to be updated to meet client demand, according to Clearview.

'Strategic advice' the model of the future

elaina

Last Updated: 27 April 2017 Published: 27 April 2017

In a recent whitepaper, ClearView said the clock is ticking for advisers who limit the scope of their services to only superannuation and insurance.

"Today, consumers are increasingly aware that if they buy insurance or top up their super on the recommendation of a financial adviser, they'll likely pay an ongoing percentage-based fee. Alternatively, they can get cheap one-off advice from their super fund or a robo-adviser," the paper states.

"How can advisers remain relevant to their clients, meet compliance standards and build value in their business? The answer is strategic advice."

However, this transition does not need to happen overnight, the whitepaper states, and advisers can start by taking small steps.

"Ultimately, advisers can journey to strategic advice at their own pace and incrementally add staff and resources as they expand their scope of advice," ClearView said.

For instance, a risk adviser may start by offering coaching on saving, budgeting and cashflow management to clients.

Meanwhile, those who provide superannuation and investment advice can begin modelling investment property scenarios and also moving into wealth protection to help clients assess their insurance needs and gain adequate cover, the paper states.

ClearView also predicts the adviser of the future will offer these strategic services to only 150 to 200 clients.

"The challenge for advisers is to gradually expand their relationship with individual clients, price their services accurately and confidently ask to be paid for the work they do and the value they add," the paper states.

"Given people are increasingly time poor, and tax and superannuation are complex areas, many clients will pay for good advice and the peace of knowing their financial affairs are being professionally managed."