Jacqui Henderson, Advice Intelligence chief executive, said this evolution was based on consumer expectations of advice.
“We see a new realm of financial advice and a new business model emerging where there’s a whole different way of charging financial advice,” Henderson said.
“With advice, a lot of advisers have put the value of advice down to the SoA document they’re providing their clients.
“They’re charging $2,000 to $5,000 for this SoA document but it’s a document the client never reads.
“It gets put in a drawer and they never look at it again, so really is the value around this SoA document?”
Henderson said clients were not interested in buying a document but to buy a solution to a problem to help them achieve goals.
“It’s not the document that’s going to help and that’s not where the value is seen by the consumers,” Henderson said.
“They’re not coming to ask to outperform the market by 3%; they want to send their kids to a private school or retire at age 55, etc. those are the outcomes where the value really is.”
Henderson said the future of advice would be more aligned to what consumers want, which included technological access to information on demand.
“Technology will also play a big part in that because a consumer doesn’t want an 80-page document, they want it digitally,” Henderson said.
“An app so I can see how I’m tracking, see my financial plan digitally, it’s linked to my investments, it’s linked to my cash flow and I can see how I’m tracking.
“I can go at any time for that instant gratification on an app and that’s where financial advice is heading.”
Source: Money Management