The industry organisation representing New Zealand non-banks has voiced its support in fast-forwarding access to robo-advice
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The Financial Services Federation (FSF) has spoken out that New Zealand’s legislation is playing catch up with the growing appetite to access financial advice online.
The FSF says the law is currently hindering the development of personalised robo-advice models in New Zealand, as it states financial advice must be given by a natural person.
However, a consultation paper recently released by the Financial Market Authority (FMA) may mean roboadvice may become available sooner rather than later.
Speaking to NZ Adviser, Financial Services Federation executive director, Lyn McMorran said a major benefit of robo-advice is ease of access. “That’s advice in all spheres of financial services not just in consumer credit contracts, it’s absolutely everything.
She said currently financial advice for many people is not an avenue they consider taking until they either reach retirement or have something to invest. “Whereas you need financial advice all the way through your life,” she said.
“The minute you start taking on debt you need advice around how you manage that debt and how you protect yourself if something goes wrong - you need financial advice through the whole process of buying a house, particularly these days.
“The trouble is it’s harder and more expensive to access if you’ve got to deal one-on-one, face-to-face with a person, so obviously robo-advice is the way of the future.
“There’s always a place for the financial adviser to give personalised advice face-to-face – I think the value that advisers add when they do that is huge.”
She said the introduction of robo-advice would offer opportunity for advisers to tap into a younger client base. “I think the forward thinking ones will absolutely look at it from the point of view of ‘how do I actually bring on a stream of younger people who need financial advice at the beginning of their lives’.
“Obviously you’ve got to have the checks and balances around it to make sure that the advice is going to be appropriate for the customer – that’s the most important thing, is making sure the advice is meeting the customer’s needs. So you’ve still got to have a really robust needs analysis process, even online.”
McMorran says she expects New Zealanders will embrace the roboadvice option “once they became aware of the fact that it exists”.
“I think the New Zealand market for advice is still quite immature in lots of ways in the fact that I don’t think a lot of consumers really understand the value of advice and what it does for them,” she told NZ Adviser.
The Financial Services Federation (FSF) has submitted in support of the Consultation Paper: proposed exemption to facilitate personalised robo-advice, which could accelerate the provision of personalised robo-advice services ahead of law reforms which aren’t likely to take effect until 2019.
The FSF says the law is currently hindering the development of personalised robo-advice models in New Zealand, as it states financial advice must be given by a natural person.
However, a consultation paper recently released by the Financial Market Authority (FMA) may mean roboadvice may become available sooner rather than later.
Speaking to NZ Adviser, Financial Services Federation executive director, Lyn McMorran said a major benefit of robo-advice is ease of access. “That’s advice in all spheres of financial services not just in consumer credit contracts, it’s absolutely everything.
She said currently financial advice for many people is not an avenue they consider taking until they either reach retirement or have something to invest. “Whereas you need financial advice all the way through your life,” she said.
“The minute you start taking on debt you need advice around how you manage that debt and how you protect yourself if something goes wrong - you need financial advice through the whole process of buying a house, particularly these days.
“The trouble is it’s harder and more expensive to access if you’ve got to deal one-on-one, face-to-face with a person, so obviously robo-advice is the way of the future.
“There’s always a place for the financial adviser to give personalised advice face-to-face – I think the value that advisers add when they do that is huge.”
She said the introduction of robo-advice would offer opportunity for advisers to tap into a younger client base. “I think the forward thinking ones will absolutely look at it from the point of view of ‘how do I actually bring on a stream of younger people who need financial advice at the beginning of their lives’.
“Obviously you’ve got to have the checks and balances around it to make sure that the advice is going to be appropriate for the customer – that’s the most important thing, is making sure the advice is meeting the customer’s needs. So you’ve still got to have a really robust needs analysis process, even online.”
McMorran says she expects New Zealanders will embrace the roboadvice option “once they became aware of the fact that it exists”.
“I think the New Zealand market for advice is still quite immature in lots of ways in the fact that I don’t think a lot of consumers really understand the value of advice and what it does for them,” she told NZ Adviser.
The Financial Services Federation (FSF) has submitted in support of the Consultation Paper: proposed exemption to facilitate personalised robo-advice, which could accelerate the provision of personalised robo-advice services ahead of law reforms which aren’t likely to take effect until 2019.
