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.”
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