Retirement
Are robo-advice services living up to the hype?
A consulting firm has suggested that a majority of Australian investors are unlikely to get proper value out of robo-advice services despite the excitement around this emerging arm of technology.
Are robo-advice services living up to the hype?
A consulting firm has suggested that a majority of Australian investors are unlikely to get proper value out of robo-advice services despite the excitement around this emerging arm of technology.
In its latest Trialogue column, NMG Consulting said that the excitement about the "democratisation" of personal financial advice promised to Australians via robo-advice has waned.
“Ultimately, the industry has been too narrowly focused in its attempt to bring digital advice to the mainstream," the blog post said. "To date, available propositions fall mostly into two categories: investment advice and retirement calculators.”
The digital investment solutions available to consumers offer little to a majority of Australians and actually cater strongly to the wealthiest 20 per cent, it said.
“Having led the vanguard with what most people think of as ‘robo-advice’, digital investment advice providers typically seek to algorithmically match customers’ risk or behaviour profiles and discretionary investment goals to model portfolios,” the post said.
“Such offers certainly have a clear mechanism for revenue generation (investments are normally passive with a healthy mark-up), but the market need they’re attempting to address is less obvious. In a defined contribution pension market where mandated pension saving is universal, the value of advice that operates specifically outside of this environment is questionable. How many Australian consumers have both the means and the desire to invest outside of super and property?”
The consultant said that the proportion of the population with investible assets for which it might make financial sense to invest through such offerings are the wealthiest 20 per cent of Australians—the very same people who can already afford holistic personal advice.
Further, while algorithmic advice tools like calculators are a leap forward in digitising advice for direct consumption, for most Australians the scope of the advice on offer is far too limited, the column said.
“Digital advice, in theory, is well suited to addressing both the issue of affordability and of value, at least where it pertains to people’s confidence in being able to help themselves," the post said. "But we are yet to see propositions that genuinely tackle the advice gap effectively.”
Retirement Planning
Empowering your future: Financial literacy and retirement planning in Australia
In today’s complex financial landscape, achieving a secure and comfortable retirement requires more than just saving money. It demands a deep understanding of financial concepts and the ability to ...Read more
Retirement Planning
How much do you need to retire comfortably in Australia?
Retiring comfortably in Australia is a goal shared by many, but achieving this requires careful financial planning and a clear understanding of the cost of living. Read more
Retirement Planning
Retirement planning advice for Australians: Avoiding common pitfalls
Retirement planning is a critical step in securing your financial future, but it's fraught with potential pitfalls that can derail even the best-laid plans. Read more
Retirement Planning
Mastering financial planning for retirement in Australia
Financial planning for retirement is a nuanced journey that requires careful consideration and strategic planning, particularly in Australia's unique financial landscape. Read more
Retirement Planning
Crafting your retirement planning spreadsheet in Australia
Retirement planning is a crucial aspect of financial management, especially in Australia where the landscape of superannuation and investments offers unique opportunities and challenges. Read more
Retirement Planning
Maximising your pension plan in Australia: Strategies for a comfortable retirement
In the ever-evolving landscape of retirement planning in Australia, securing a comfortable retirement through your pension plan has become increasingly important. Read more
Retirement Planning
Supporting our veterans: A guide to financial resources and benefits
Military veterans have made invaluable contributions to their country, and in recognition of their service, there are numerous financial resources and benefits available to support them in civilian ...Read more
Retirement Planning
The ultimate retirement planning checklist for Australians
Retirement planning is a multifaceted process that demands careful attention to financial, legal, and personal considerations. Read more
Retirement Planning
Empowering your future: Financial literacy and retirement planning in Australia
In today’s complex financial landscape, achieving a secure and comfortable retirement requires more than just saving money. It demands a deep understanding of financial concepts and the ability to ...Read more
Retirement Planning
How much do you need to retire comfortably in Australia?
Retiring comfortably in Australia is a goal shared by many, but achieving this requires careful financial planning and a clear understanding of the cost of living. Read more
Retirement Planning
Retirement planning advice for Australians: Avoiding common pitfalls
Retirement planning is a critical step in securing your financial future, but it's fraught with potential pitfalls that can derail even the best-laid plans. Read more
Retirement Planning
Mastering financial planning for retirement in Australia
Financial planning for retirement is a nuanced journey that requires careful consideration and strategic planning, particularly in Australia's unique financial landscape. Read more
Retirement Planning
Crafting your retirement planning spreadsheet in Australia
Retirement planning is a crucial aspect of financial management, especially in Australia where the landscape of superannuation and investments offers unique opportunities and challenges. Read more
Retirement Planning
Maximising your pension plan in Australia: Strategies for a comfortable retirement
In the ever-evolving landscape of retirement planning in Australia, securing a comfortable retirement through your pension plan has become increasingly important. Read more
Retirement Planning
Supporting our veterans: A guide to financial resources and benefits
Military veterans have made invaluable contributions to their country, and in recognition of their service, there are numerous financial resources and benefits available to support them in civilian ...Read more
Retirement Planning
The ultimate retirement planning checklist for Australians
Retirement planning is a multifaceted process that demands careful attention to financial, legal, and personal considerations. Read more