Market for lemons: Why super fund members don't want to pay for adviceBY JASON ANDRIESSEN | THURSDAY, 1 FEB 2018 4:54PM It's a shame for super funds that so few of their members access advice in the years around retirement. For members, accessing advice supports better financial decisions, which ... Upgrade your subscription to access this article
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There is an assumption in this article that low cost advice must be poor quality. What we are seeing though is that technology is enabling lower cost advice to be better quality than high quality advice. We might not quite be there yet, but watch this space.
This article rings true for me. Over many years I have found that, by spending considerable time with a client showing them modelling etc., they begin to understand the value of advice and are willing to pay for it. The challenge is to be able to spend sufficient time in the approach without scaring the prospective client away with price. I have developed the attitude that, like many other businesses, we are "tendering" for new work and this is a built-in cost to the business so our fees attempt to "recoup" this cost. The "charge by the hour" philosophy does not work if this is your model.
The ability to deliver quality advice to members cost effectively is here and we are currently trialling with a few funds. For most members their advice needs are relatively straight forward and can easily be met with a hybrid approach combining a digital advice tool at the core with advisors supporting the platform. The advent of new technology has meant that we can now replace many low advice tasks digitally and let advisors focus on delivering high value. We have come a long way since we launched Snowball in the late 1990's.