A new fintech is hoping to reach out to the 80% of people who don't see financial advisers via a digital financial advice platform.
Nod, backed by accelerator H2 Ventures, is aiming to bring financial experts to people on demand. Clients can ask a question, pick an adviser, receive advice, and pay for that advice all on the digital platform.
Company co-founder Joel Robbie says while the current system works great for the 20% of people who see financial advisers on a regular face-to-face basis, this leaves the majority of the market "unserviced".
"The people out there who aren't receiving financial advice are still stressing about their finances, but there isn't a model that services them; our job is to try and create that," Robbie said.
"We think we can help advisers to bridge that gap between what they're currently doing for a slightly older generation, and what's coming through on-demand."
So how does it work? After registering on the site a customer can: ask a question, receive bids from advisers containing information about cost of the advice, know the adviser's experience and personal rating, select an adviser, receive the advice, and make a payment. As the platform provider, Nod collects a fee from each transaction completed on the site.
If the adviser needs more information before providing advice, after being selected a connection is opened between the adviser and the client where the adviser can request to see a snapshot of the customer's financial situation. The platform also gives advisers the ability to upload their compliance statement for customers to download.
Robbie was quick to reassure that Nod will not operate as an introductory service for financial advisers, adding: "We are not a lead generation service - the interactions between advisers and customers are designed to happen on the platform."
While many fintechs experience significant challenges starting in the highly regulated financial services sector, Nod has been able avoid these issues by operating as a platform rather than a provider of financial services. The company is not operating with a financial services license or the security of an ASIC Sandbox.
When questioned about the potential liability of advisers providing advice on the platform which is not in the 'best interests' of the client, Robbie explained that he believes Nod is in a unique position to weed out bad advice with a digital paper trail.
"Every interaction is auditable; all the client/adviser interactions are written down, there's nothing happening over the phone, there's nothing happening in a room, all the text happens on platform," Robbie said.
Robbie also explained that while Nod thoroughly vets all the advisers who appear on the platform, the liability for ensuring that the correct advice is given falls on the AFSL licensed adviser.
Nod will soon launch Nod Plus which will allow advisory firms to bring their existing client base onto the platform.
"The clients will still receive bids to answer their questions from all registered advisers, but the firm could pay us to be at the top of that list so when the bids come in, the client would see their offering first. We see this as a great way for bigger firms to add value to their existing customers on a regular basis," Robbie said.