Tech puts value of advice in question
Addressing a room of financial advisers at the Portfolio Construction Forum’s 2019 Finology Summit yesterday, US-based financial planner, Michael Kitces, says advisers should turn their attention away from the regulators and towards technology if they want to stay relevant.
Kitces said technology has slowly (and silently) been disrupting the financial advice industry since Wall Street brokers traded stocks for non-negotiable fixed prices in the 50s, and, while advisers may think it’s the regulators that are forcing change, Kitces makes the point that regulators are simply reacting to it.
“There’s a tendency to solve the last crisis rather than the next one,” he said.
But, five industry trends he sees reshaping the advice industry all stem from technology, with the first being the great convergence of broking and advice models, followed by a crisis of differentiation, the search for a new business model, and a focus on the client experience.
The Australian financial advice industry, he says, is currently tackling the great convergence where advice firms are converging with dealer groups, and the regulators have challenged vertical integration.
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