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What happens when the technology evolves?
Harnessing big data will benefit advice delivery, especially amongst larger licensees and product providers, of whom are focusing on their own data sets. Data will assist licensees to gain valuable insights into client behaviours, set compliance rules for non-subjective decision making and evaluate decisions made by planners. As a result, we will start to see when advice falls outside one standard deviation of the “normal” advice.
As machines get smarter, they will begin to evaluate various scenarios, combinations of strategies and product recommendations automatically. Thus, providing pre-emptive suggestions for planners based on the scenario that puts their client in the best financial position. With technology assisting planners, they will be able to efficiently determine the most suitable recommendation for their client and advice preparation time is reduced considerably.
Clients all have unique situations, preferences, biases, emotions and past experiences. These are all things that machine learning will struggle to learn over the next 5 years.
The human element is the value the planner provides in a new tech-enabled world; human-to-human conversations, accountability, trusted relationships and validation.
The new world of advice technology (AdviceTech) and regulatory technology (RegTech) will enable safer product and strategy selection as it can be benchmarked against reasonable past decision making. Red flags can be set to alert planners or compliance teams to when decisions are made outside of one standard deviation to the normal, allowing advice to be checked in real-time before it is delivered to clients.
This industry is spending billions on reviewing past advice and remediating past decisions. Safer and proactive compliance within advice delivery will reduce the pressure on licensees, regulators, government and professional indemnity providers that continues to put a squeeze on the profession.
With technology making advice more efficient, instant SOAs with in-built compliance will bring enhanced efficiency in the production of advice. Those efficiencies are needed to bring advice affordability back to the population. It is needed to maintain sustainability for planners and licensees who are facing ever-increasing costs.
Technology will reduce the cost of advice and open new markets for planners with different pricing models to help more Australians towards financial wellbeing.
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