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Robo-advice firms facing hurdles with SMSFs

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Miranda Brownlee
12 October 2017 — 1 minute read

The wide range of unique client scenarios associated with SMSFs is presenting some challenges for automated advice providers where they attempt to fully automate certain services.

Speaking to SMSF Adviser, ASAP chief executive Jim Hennington said while the uptake of automated advice has continued to rise in the SMSF space and will become increasingly efficient with time, there are still some difficulties with fully automating the advice process.

“With SMSFs, [there is] such a wide range of unique client scenarios, that there’s just too much variety to lock it down into an algorithm as yet,” explained Mr Hennington.

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“When we set up ASAP, we expected that there'd be certain advice scenarios that we’d automate, but as yet, we’re playing it a bit cautiously [so] an adviser [still] checks each recommendation.”

Where the client scenario satisfies a range of checks and validation rules then the advice will be automated, he explained, otherwise a human adviser will still review it and may undertake further enquiries and make amendments before it’s issued.

“If you automate it all too early, the risk is that [you’ll] miss key issues, or the system won’t be able to deal with the full range of scenarios that real clients have. ASIC have what they call the 'know your client' rules, whereby if you haven’t got enough information about the client scenario, you need to carry out further investigations to make sure the adviser fully understands the client situation and what their objectives are,” he said.

“As digital advice gets more experienced we’ll be able to make it even more efficient over time,” he said.

Miranda Brownlee

Miranda Brownlee

 

Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years. 

Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

You can email Miranda on: This email address is being protected from spambots. You need JavaScript enabled to view it.

Robo-advice firms facing hurdles with SMSFs
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