The AdviceConnect platform provides banks, insurance and investment companies, along with advice groups, the ability to offer low-cost advice services to customers over the web. For the 78 percent [footnote1] of Australian households that are currently 'unadvised' by financial planners, low-cost channels such as AdviceConnect puts compliant financial advice within easy reach.
'Financial institutions know that the there is a huge need for advice services in the mid-market,' said Mike Giles, WealthPoint CEO. 'Face-to-face advice is both expensive to give and to receive. Until now there has been a struggle to find a business model that can lower the cost of delivery, maintain strong compliance and still deliver real customer benefits.'
Accessibility of financial advice is one of the five drivers of the Retail Investor Taskforce established in late 2007 by Australia's corporate, markets and financial services regulator, the Australian Securities and Investments Commission (ASIC).
'Retail investors face some very critical investment and financial decisions at various stages of their life,' said Tony D'Aloisio, Chairman of ASIC, in a paper presented at the Financial Planners Association Conference in November last year. '...the point is that these decisions can be critical, and have major long-term impacts on a person's financial position. It is therefore important that financial advice is available to those who need it.'
Wealthpoint's Giles believes the AdviceConnect platform is ideally placed to fill the gap in advice accessibility for those people who need advice but are not currently served by the existing face-to-face financial advisor or phone advice models.
'We understand that, while taking a technology neutral stance, ASIC generally welcomes initiatives that increase access to financial advice to meet consumer needs, so long as it can be provided in a way that complies with all applicable regulatory requirements,' commented Giles.
'Customers need it, advice providers want to give it and regulators are open to it - even Senator Sherry's new Financial Services Working Group is seeking solutions that would improve access to cost effective financial advice,' stated Giles [footnote 2]. 'Low-cost advice via platforms like AdviceConnect is an idea whose time has come.'
The AdviceConnect platform was developed based on WealthPoint's extensive experience delivering web-based advisor platforms across Asia for players like ING and St. George Bank. Built on a secure web framework, AdviceConnect allows customers to request advice from their preferred financial institution's website with 100 percent transparency.
'We estimate AdviceConnect can deliver simple and limited advice five to ten times more efficiently than traditional face to face models, effectively reducing the per customer cost and clearing the way for low-cost advice services,' stated Giles. 'Low-cost advice is going to shake up financial advice models forever.'
1. From Galaxy Research, Consumer Attitudes to Financial Planning, May 2007
2. From media release dated 5 February 2008 issued by Senator the Hon Nick Sherry, Minister for Superannuation and Corporate Law