Consumer trust isn’t something to be taken for granted, but reports from the UK, US and here at home are all pointing towards an uplift in trust levels around financial advice, which can only be a welcome development.
There are significant tailwinds behind the financial advice industry at the moment, but some major obstacles are still preventing advice practices from taking advantage of surging demand according to a new study from CFS.
Is affordable advice possible post the Royal Commission?
The Banking Royal Commission was a watershed moment for the financial advising industry, and almost two years on, has there been change? In one word, yes. Too much change. So much change, that Australian Securities and Investments Commission (ASIC) and the Morrison government, along with a long list of industry leaders are all saying that change has gone too far.
Recognising this, ASIC is starting to examine problems relating to the supply of good-quality affordable personal advice. While financial advisers are hit with heavy regulation and forced to take up further study, the door has opened for nimble start-ups looking to create a platform to remove the stress and pressure that advisers face.
Lumiant does just that.
Founded by Santiago Burridge, Lumiant is a fintech start-up looking to “transform the financial advice industry by partnering with advisers who seek to deliver on the promise of helping people lead extraordinary lives.” The fintech start-up is yet to go live, but isn’t far off. Burridge says the platform is SaaS (software-as-a-service)-based, allowing clients the ability to connect into the platform and interact with their adviser. In the same way, advisers can “continuously show the client that their confidence is improving, values are being met and they are on track to lead their best life.”
The system uses goals-based factors to provide financial advice. It identifies what goals and values are important to a client and then shapes strategies “to realise priorities and goals, then drives behavioural change for living an extraordinary life.” In a world that has been all too constrained by product-driven advisers pushing products, or excessive compliance costs, it was only matter of time before consumer confidence was all-but-gone. These days, consumers are more likely to trust financial advisers if they know ASIC is there ready to enforce and punish any wrong doings. But this isn’t real confidence.
At present, financial planning “statement of advice” solutions, or SOAs, are heavily tied to product and constrained by compliance and regulatory requirements. This prevents advisers from delving deeper into a client’s lifestyle dreams and goals and being able to offer a personalised solution. Burridge was inspired to create a platform that pushed past the confidence and product barrier, and provided goals-based financial advice. According to Adviser Innovation, Burridge says “If there is one thing that COVID-19 has taught us, it’s that there is much more to life than money; that it is time to live our lives much closer to our values, to align our money with our values and drive more purpose out of what we have created.”
Instead of building a platform focused on producing the perfect SOA or offering the perfect investment product, Burridge built a service focused on identifying clients’ values and goals, relationship with money and what their dreams truly mean to them. A platform that involves the client on a constant basis providing meaningful advice that goes well beyond the stock-standard diversified managed fund.
Burridge says Lumiant is built around the “things that truly matter to people and how most money things are actually life things.”
