Digital advice spurring demand for full personal advice: Report

New research from the Financial Services Council (FSC) reveals digital advice is activating the demand for full personal advice and presents the opportunity for the industry to finally provide regulated digital advice at scale.

The role and value of digital advice in Australia paper, compiled in conjunction with CoreData and Borromean Consulting, highlights the urgency to act on several, strong foundations that will pave the way for digital advice to reach more people.

This includes the fact that "digital capability is proven and operational", governance frameworks are more robust than a decade ago and the strengthening of adviser professional standards.

"If regulated participants move too slowly, consumers will normalise the use of unregulated digital and AI-based tools before institutional confidence catches up. Rebuilding trust after that shift will be materially harder," the report warned.

"Delay will not preserve the status quo, but it will expand the gap between consumer behaviour and regulated advice capability. What remains is coordinated intent across the sector and the confidence to implement solutions at scale."

Among superannuation funds, the research found a high uptake of digital advice among pre-retirees and repeat usage from members in general.

In essence, digital advice must now be considered "core system infrastructure" for super funds as it allows for scaled access to help and earlier activation of engagement and lower cost-to-serve.

Most digital tool users indicated they are likely to seek full professional advice about retirement adequacy and investments in the future. Among pre-retirees aged 55 to 59, digital users are more than three times more likely to seek financial advice in the next 12 months compared to non-users.

FSC chief executive Blake Briggs said digital advice is complementing traditional advice by meeting Australians where they are - providing simple, accessible guidance that can scale with their needs over time.

"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 said

The paper recommended what is now needed is "coordinated execution".

For super funds, this means embedding digital advice within endorsed advice strategies rather than treating it as an adjunct tool.

For technology providers, it means demonstrating "ecosystem fit, governance maturity and clarity of operating philosophy, not simply technical sophistication".

Advice businesses, meanwhile, can identify where digital can extend reach and improve economics without undermining trust or professional standards.