Financial Mappers aims to make financial advice affordable and accessible to all. More importantly we believe that giving financial advice to all Australians should be provided by those licensed to give that advice.
Increasing regulation has priced financial advice out of the budget range of everyday Australians. Investment Trends estimate 48% of the Australian population have unmet advice needs. This trend is likely to increase with a new round of increased regulation.
Dante De Gori, FPA CEO, in his report The Future of Financial Advice states:
I believe financial planning should be accessible to all Australians, and I believe in the importance of financial planning to the Australian society – Dave De Gori
‘Orphans’ may suffer under financial advice changes
The Future of Financial Advice legislation may have unintended consequences. One of the most worrying is that increased cost of compliance and removal of commissions will see advisers unable to service their clients with lower incomes and smaller assets under management. It is estimated that thousands of existing clients may be set adrift to seek financial assistance elsewhere.
For me, the big concern is that these orphaned clients will seek online assistance from organizations who have been able to skirt the strict regulatory requirements and provide some general advice. This general advice does not take into consideration the specific financial circumstances of the client. This could result in some clients not appreciating the often complex reprecuperation when applied to their financial situation.
In recent years it seems that increasing regulation has made the process, not the advice the focus. According to the FPA, this has resulted in advisers needing 26-man hours to consult with a client, create a plan and deliver a Statement of Advice.
This is not sustainable for all but the high net wealth clients.
Fintechs have been working hard to resolve this problem. Financial Mappers has worked with advisers to develop software that should reduce their planning time by half.
Financial Mappers has upgraded its software to allow financial advisers to give all those orphaned clients, affordable financial advice.
Not one client needs to be let go
Of course, compromises must be made, and advisers need to ensure they still meet the strict compliance issues when giving specific scaled advice. The alternative is leaving hundreds of thousands of everyday Australians without access to professional advice. This advice is something they desperately need when you consider the poor financial literacy statistics in Australia.
For most people, their financial advice needs are simple and generally relate to their short-term needs. Simple questions like the following require simple answers:
An adviser should be about to cut the time to deliver the answer to the client in a quarter of the current time it takes to see a client, make a plan and deliver the Statement of Advice.
All the advice can be provided online.
Financial Mappers is unique in that the software was designed for client use, but for the adviser to create complex financial plans, write an SOA and share the report in a digital multimedia format.
The magic of Financial Mappers is the ability for financial plans to be shared with the client. Research is showing that all demographics are increasingly wanting to be part of the planning process.
Co-planning is the New Black for financial advice.
Let us examine the process of co-planning where the client can reduce the adviser planning time and costs by doing a lot of the work first. The Millennials want to plan for no more than 5-years. They mainly want assistance to reduce personal debts, save for a home, and then start a long-term investment plan.
By reducing the time period for which the advice is given, the cost can again be reduced.
Imagine this scenario:
- The client is given access to Financial Mappers Lite which allows the client to create a 5-year plan using the same software as the adviser.
- With the introduction of our new feature “About Me and My Family”, the client can complete a basic Fact Find, within the software, and this can be included in reports.
- The client completes all their current financial position.
- The client imports their current financial position to create a 5-year plan. The client can then creates their plan, which could include reducing debts, allocating savings to investments, buying and selling assets, or managing their superannuation account over this 5-year period.
- The client shares this plan with the adviser. The adviser takes a copy of the plan, which includes their request for specific advice. If necessary, the adviser can increase the length of the plan, optimize the plan, and write the SOA which is shared digitally. The final first 5-years of the plan is shared back to the client, so the client has a road map.
This format, coupled with a good financial literacy program, allows the adviser to service the unmet needs of the Australian population.
This method of providing advice to those who can’t afford or don’t require full-service advice would be very suitable as a subscription model. The client pays an annual fee, has access to the 5-year planning tool, a financial literacy program, and receives a fixed amount of advice time each year.
Glenis Phillips SF Fin – Designer of Financial Mappers
While some financial advisers may not like what they read in these articles, it is important for advisers to look at all commentary about their industry and make sure the public do understand the great services provided by Financial Advisers:
- How to make financial advice more affordable (Money)
- How to get financial advice without forking out $3,000 (Aleks Vickovich of AFR)