Technological advances in scaled advice in the US mean investment plans are being finalised in as little as three days, unlike the six to eight weeks common in Australia, according to Vanguard.
Growing use of paperless procedures, programs that automatically calculate wealth management plans and video conferencing have all sped up the process.
Karin Risi, leader of Vanguard’s US advice services group, said that feedback from
Australian advisers and superannuation funds, which she recently met with, showed that much more could be done to scale advice.
She found the typical advice process in Australia often starts with investor questionnaires on paper, preliminary face-to-face meetings, followed by multiple phone calls before an actual plan is delivered.
“The end result is a hefty 70-page document with a lot of disclosures. That is similar to where the US market was 10 to15 years ago.”
Now this has been drastically shortened through the use of custom-built advice engines that allow individuals to fill out details online and then generate a preliminary plan, which is sent to the client in PDF format. The client then has a chance to review it before talking with a planner.
Risi added that investment plans had also reduced to eight to 15 pages in length (including several pages of legal disclosure) using greater use of graphs, which has had a knock-on improvement in individual’s engagement.
“Taking out a lot of the text and including more graphical elements is more engaging, so it feels a bit less like work. Individuals then come to the consultation in an engaged fashion and they started talking it through in an engaged way.”
The interaction with a custom-built automatic advice generator from which the basis of the conversation with the planner starts, also speeded up the process.
“From start to finish it is only as long as the client takes to fill out the investor questionnaire. So, if they take a day to fill it out and send it back and make an appointment with a planner two days later (that is our minimum turnaround), the whole process could take three to four days as a minimum.”
The final consultations can use video conferencing, allowing individuals to be at home. The planner can use split screens to communicate on one half of the screen, with graphical projections on the other half of the screen.
Risi said this gave individuals a greater sense of ownership, but also made the process feel less like work.
“When you get the final version of the plan, you have already seen it in the consultation. You have watched the adviser play with the modeling. So when you get it, you feel like you own the plan.”
Risi’s comments coincided with a report from a Griffith University research that identified a shortfall in financial planners.
Dr Rakesh Gupta, a senior lecturer at Griffith Business School, said the shortfall was leading to an over-reliance of individuals basing their investment decisions primarily on past performance.