While concerns have mounted that the Federal Government’s Quality of Advice Review (QAR) will change how advisers operate, Padua Solutions has signalled its focus on the opportunities the review will bring for fintech innovation.
Anne-Marie Esler, co-CEO and co-founder of the advice-tech firm, said while the recommendations have yet to properly convey how the delivery, cost and value of financial advice will change or remain the same, the opportunities for fintechs and tech-based solution providers should be recognised.
“Technology and fintech providers [can] play a greater role in streamlining the service and advice that advisers provide,” she said.
“The list of advice elements remaining the same is a long one. Well documented research and strategies will still be required, as well as the ability to access quality product research.
“Client goals and objectives will still need to be understood and the scope of advice will need to be bedded down and agreed to prior to delivering the advice.”
Esler said the impact of technological development by providers is intertwined with the need to highlight the value of advice to clients, shown especially through the provision of Statements of Advice (SOAs).
“This requires financial planners evidencing the strategic benefits of their advice, the cost of the advice to the client, and the value that remains thereafter,” she said.
“Licensees will still expect good processes and standards to be met in a manner that can be evidenced, and professional indemnity insurers will also expect strong governance. Of course, ongoing continuing professional development requirements will also still need to be met.”
Esler said the QAR recommendations will help to facilitate “much-needed” fintech development and increase the competition among providers to deliver more streamlined and cost-effective advice.
“The improvements to financial technology will reduce the time it takes to produce advice – which can take up to 30 hours for a complex SOA – and this will reduce the costs involved,” she said.
“The right technology can streamline this process. It can take the universe of over 1000 available strategies and filter those available to the client based on their specific circumstances. The technology can then calculate the benefit and cost of each of the available strategies, and determine the one which provides the greatest value.
“With software focused on supporting strategy development, and tools that allow advisers to see what options are available, they can provide more in-depth and varied recommendations in a fraction of the time it would have taken otherwise.”
The original article by Yasmine Masi, Financial Newswire can be viewed here: https://financialnewswire.com....
