The average cost of financial advice is upwards of $3,000. For those in most need of financial advice, this cost is beyond their reach until they have accumulated some wealth and developed sound saving techniques. These are the people who will eventually be the Financial Adviser’s full service clients requiring detailed financial advice.
The problem for Financial Advisers is that consumers are being forced to seek financial counsel from other sources and they may never return to the services of a Financial Adviser.
With the Quality of Advice Review (QAR), the government has stated it would like to see the development of low-cost advice. However, the government is lagging in the provision of legislation that will allow the financial advisory industry to move forward.
Advice Online
In the meantime, Plencore Wealth Ltd has developed new software that may enable the Financial Adviser to guide clients with general information about saving for the future, without providing specific advice. However, the software also allows the adviser to give quite detailed advice.
Please watch this video about what Advice Online to trying to achieve.
As legislation for affordable advice is completed, this software will provide the adviser with the tools to quickly create a financial plan and provide advice at the level of advice the consumer needs or can afford.
In the meantime, the adviser could structure their engagement with these clients using Advice Online. Included in the software is a financial literacy program that can guide clients in their journey to improve their financial management skills.
Please watch this video to understand the new multimedia financial advice experience.
The Entrepreneurial Financial Advice Practice
For the entrepreneurial financial adviser, they could provide low cost advice to the mass market now. This advice may be called a Strategy Document, where only a description of the adviser’s plan is included and is shared online with the client.
The cost can be reduced by limiting the length of the plan and maybe limiting the plan to a Savings Plan.
In addition, the cost is reduced because the client provides their personal financial details, that the adviser can import directly to a plan.
Adviser time can be reduced by limiting the advice. For example, the adviser may specifically exclude:
- Insurance Advice
- Superannuation Advice
- Product Specific Advice
Once the client has engaged and paid a lower fee for simple, non-specific advice, the client could then be encouraged to seek more specific advice tailored to their specific financial situation and that was excluded from the first document. The client would pay for this detailed advice.
Each step of the process will provide the client with the information they need at a price they can afford. The Financial Adviser will be compensated adequately at each step of the process.
Glenis Phillips SF Fin – Designer of Financial Mappers and Advice Online
Disclaimer: Financial Mappers does not have an Australian Services License, does not offer financial planning advice, and does not recommend financial products.
