Australia's financial advice industry should pay heed to the likes of Facebook, Google and Uber if it is to meet the evolving expectations of clients.
Speaking at the inaugural IMAP InvestTech conference in Sydney today, netwealth joint managing director Matt Heine said the advice industry is not thinking big enough, putting itself at risk of being left behind if it doesn't catch up to the rest of the world.
Findings from netwealth's recent AdviceTech report show advisers identified robo-advice, managed accounts and scaled advice as the top three technologies that will have the biggest impact on advice practices in the next five years.
"I've got a real issue with this. This was done at the start of the year and these three trends have already changed the industry - this is stuff that was put in place three, four, five years ago," Heine said.
Respondents didn't consider blockchain, artificial intelligence or Know Your Customer (KYC) technologies to be gamechangers, despite the world's biggest companies already using them to great effect.
"Google, Facebook and Uber are setting consumer expectations. The financial advisers of today are not being compared to their fellow adviser down the road or in the bank, [clients are] looking at the services they use all day every day and wondering why what you're doing doesn't match it," Heine told delegates.
"These companies have absolutely mastered engagement, they've mastered hyper-personalisation, they've mastered making sure that you get the right message at the right time about the things you're most interested in and it's shifting consumer needs."
Technology has allowed these giants to remove friction from people's lives and advisers can implement similar technologies in their own practices and offerings to do the same, he said.
"Advice has got friction the whole way through it. There is actually nothing about the advice process that is smooth, and that really starts to accumulate around client strategy and management and investment execution," Heine said.
The research showed 23% of advisers are currently using an online fact-finding tool, Heine said.
"This is the most cumbersome part of the whole process and it's the first experience your clients have with you, and the worst thing is that the industry is not improving it - the majority are still using pen and paper," he said.
According to Heine, chatbot technology has the potential to fundamentally change the way advisers get to know their clients and their capacity for risk.
"You're going to see these popping up everywhere in the next 12 months...If you go through the emails and queries you receive on a regular basis, there's probably 10 or 15 questions you get all the time. If you can respond to those questions automatically with pre-composed answers, think of how much more productive your business will be," Heine said.