MAGAZINE OF CHOICE FOR AUSTRALIA’S WEALTH INDUSTRY
www.moneymanagement.com.au
Vol. 35 No 20 | November 4, 2021
LONGEVITY RISK
Growing the pie
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MANAGED ACCOUNTS
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Meeting client needs
ROBO ADVICE
Advisers and technology
Reputational damage impacting new entrants to advice BY LAURA DEW
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Robo 2.0: Threat or opportunity? DURING the pandemic, consumers stuck at home or with increased household savings opted to begin using micro-investing apps or trading for the first time. The growth of these apps, which include Spaceship, Raiz and Stockspot, are part of a new generation of robo products and allow consumers to invest as little as $50, far smaller than amounts invested by advised clients. This is not the first time advisers have faced the threat of robo advice but previous iterations struggled to find a footing in the market. On the other hand, these platforms have already accumulated billions of assets from users in a short space of time. This was combined with people accessing advice via social media or sites like Reddit, a fact that had not gone unnoticed by the regulator. Commentators agreed they presented an opportunity for advisers to learn and engage with younger clients and they would be wise to explore the technology and consider their own communications with clients. They were also encouraged to embrace technology within their businesses as they could help to streamline the process for them and reduce the time spent on mundane tasks. This would also allow advisers to focus on the areas where they added the most value to clients.
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ADVISERS and professional bodies are “doing a good job” at promoting financial advice but need to repair the industry’s reputation if they want to encourage more people to join the profession. Speaking to Money Management, Kirsten Macdonald, program director for commerce at Griffith Business School, highlighted how people were unaware of the roles or benefits of the financial advice profession. This was a problem when there were many advisers opting to leave the industry in light of the changing regulatory requirements but few who were joining to replace them. “It is hard for students or career changers to know about financial advice and they might be getting information from people
like their parents who don’t understand it,” Macdonald said. “Advisers and professional bodies are doing a good job at getting the message out but the trouble is they are up against all the regulatory reform and the colossal advice failures which were highlighted by the Royal Commission. Every industry will have bad apples but the bad ones in financial advice were on show. “The industry should demonstrate how it has changed with things such as the code of ethics and start to repair its reputation.” She said she had seen many people move to financial advice from professions such as teaching or nursing who were good at nurturing relationships and empathy and from engineering as they were Continued on page 3
$450 super threshold removed BY JASSMYN GOH
AS part of a key commitment in the Budget, the Government has introduced a bill to remove the $450 per month income threshold for superannuation payments. The Treasury Laws Amendment (Enhancing superannuation outcomes for Australians and helping Australian businesses invest) Bill 2021 also aimed to improve flexibility for those preparing for retirement, support more Australians to own their first home, and help Australian businesses invest. The bill would also reduce costs and simplify reporting for selfmanaged superannuation funds (SMSF) and small Australian Prudential Regulation Authority (APRA) regulated funds. The bill’s announcement by the minister for superannuation, financial services, and the digital economy, Jane Hume, said the Continued on page 3
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