The latest industry research has found better retirement outcomes are being achieved as well as improved access to financial guidance as a result of the use of digital advice tools.
The Financial Services Council (FSC) today released its “The Role and Value of Digital Advice in Australia” report, which incorporated industry interviews and national consumer research to explore the evolution of digital advice and found this method of financial guidance is emerging as a trusted alternative to unregulated online sources.
The study found digital advice is not replacing professional human services, but is facilitating deeper client engagement. Here the report revealed 56 per cent of respondents with an ongoing relationship with a financial planner see digital advice tools as a valuable component alongside human advice.
The analysis also highlighted the fact digital tools act as a lower-cost entry point for Australians who have not traditionally engaged with professional advice. Here the research indicated a strong willingness to pay for personalised digital planning and that consumers who engage with digital tools are more likely to seek further full personalised professional advice regarding retirement adequacy and investments.
Further, the survey results showed pre-retirees, aged 55 to 59, who use digital advice are more than three times more likely to seek broader financial advice services in the next 12 months compared to non-users.
FSC chief executive Blake Briggs suggested these tools offer a reliable pathway to informed decision-making in an environment where many turn to unregulated influencers.
“Digital advice is complementing traditional advice by meeting Australians where they are – providing simple, accessible guidance that can scale with their needs over time,” Briggs explained.
“In an environment where many are seeking financial peace of mind and turning to unregulated ‘finfluencers’ and artificial intelligence for information, digital tools from trusted providers offer a more reliable pathway to informed decision-making and greater confidence.”
He also pointed out the implications digital advice will have regarding the Delivering Better Financial Outcomes (DBFO) Tranche 2 reforms.
“Tranche 2 remains an important priority for widening access to scalable, accessible advice. However, mature players in the superannuation industry are already acting, rolling out innovative, affordable hybrid advice solutions,” he said.
“As this report makes clear, progress in providing accessible advice is happening regardless of the pace of government reform, ensuring more Australians are equipped to engage with their financial future, gain peace of mind and take control of their retirement.”
The report was compiled using analysis performed by research house CoreData and Borromean Consulting.
Darin Tyson-Chan
Editor
Darin is the founder and publisher of Benchmark Media, an independent publishing house whose mastheads include financialobserver, selfmanagedsuper and smstrusteenews. He has been covering the financial services space for over a decade and in this time he has worked for a variety of trade publications. Darin has also written for the Money section published in The Sydney Morning Herald and The Age.
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