Is technology making you redundant?

by |

Chairman and founder of Trulity – an online DIY financial planning business – Bill Kruger, has told the Australian Financial Review that financial planning is like a supply chain, with a factory feel to it.

The article on Friday said that his DIY financial planning website Trulity offered consumers “pretty much everything you need to control your own financial planning and investing activities”, for $27 a month.

“If you pulled 100 files [from most advisory firms] 90 of them would probably be identical plans, except for different names, dates and ­numbers… I thought we should be able to computerise the whole process,” Kruger said.

“People will begin to scratch their heads and wonder why they’ve paid thousands of dollars for this process.”

The former accountant supplied financial ­planning services to Deloitte under an alliance arrangement, before selling up in 2008 and subsequently launching Trulity.

Trulity produces model ­portfolios – composed mainly of direct ­equities, exchange-traded funds and other low-cost passive products – but it’s up to clients to implement investments themselves if they wish to follow the recommendations.

The firm retains its financial services licence, but human-generated advice is not encouraged and they stopped accepting traditional full-service financial planning clients in July 2009. They encourage consumers to contact their accountant if they require additional assistance, or to call one of their strategists, who charge $40 per 10 minutes.

Former head of strategy at FuturePlus Financial Services Wes Gillett doesn’t think that technology will make financial advisers redundant, but that it will provide them with the opportunity to service lower-value clients in a cost-efficient way.

“Technology will push inefficient advice-givers or those charging for non-value activities out of business,” he told the AFR. “But technology really only replaces the ‘hygiene’ part of any process. The role of good ­advisers to distil wisdom will always be important.”

More stories:

How to optimise your referrals

Time to review your clients' super as taxes announced

Planners’ expectations for 2013 revealed

 

  • Phil on 5/02/2013 11:44:17 AM

    What a great source of income for my financial planning business. If a potential client does not see value in my advice i can recommend them to this service and receive a referral fee of $9 p/m for doing nothing*. . . . . and charge them a fee of $38 per 10 min for additional advice they may require. Will i (or any accountant for that matter) be required to disclose every year that i am receiving $9 p/m and/or do they need to opt in every two years?

    *$9 pm referral fee is advertised on their website

  • Pat on 4/02/2013 10:47:12 AM

    @Simon: so an 'average' working family, who should simply put an extra $x per week into the mortgage and an extra $y into their super before tax, ensure they are in low cost, index style super funds matched to their risk profile and have adequate insurance needs how much strategic advice?

    We [our industry] deliberately over-complicate the advice process for most clients. We muck around with investment portfolios well beyond what they need, changing managers because an adviser, relying on their APL and licensee funded research, says to sell A to buy B, with no long term benefit.

    The 'average' client, doesn't need half the crap we sell them.

  • Simon on 4/02/2013 10:15:37 AM

    How stupid. So now the client is paying the accountant more, the "strategist" at $240 / hour and them. Sounds to me like they will pay about the same just in multiple smaller chunks.

WP forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions