Financial advice is a service valued by many Australians, and while many more are interested in seeking advice, it is currently not accessible to all.
One of the main reasons for this is many Australians find the cost of advice prohibitive. A major contributor to the cost of advice is the cost of compliance and the complexity associated with delivering the core functions of running an Australian Financial Services License (AFSL) – such as governance, revenue processing and the management of fee disclosure statements.
HUB24 believes it has a role to play in addressing this challenge by developing solutions that help licensees be cost-effective and to meet their compliance obligations. To do this, HUB24 has been working closely with a number of forward-thinking advice collectives in Australia. They have confirmed the considerable and increasing cost and effort that goes into core licensee functions, additionally the time and development resources needed to solve this problem which erodes their capacity to focus on other areas such as assisting practices to grow and to be more profitable.
One of the major challenges identified by licensees is access to quality data. Advisers spend an enormous amount of time establishing what works for them, their practice, and their clients. They label and store documents their own way, making it difficult for licensees to monitor what is happening within practices. Moreover, much of the data held is unstructured and not visible, contained in emails and PDFs of SoAs, RoAs and FDSs.
The cost of providing advice can be reduced if advisers and licensees have access to whole data sets. However, the advice collectives HUB24 spoke to agreed that to be most effective, scale and collaboration are required so that compliance and the ability to provide cost-effective advice are not sources of competition, but rather the foundations of a robust and accessible advice industry.
There is increasing recognition across the industry regarding the need for solutions to address the growing advice gap, with the Australian Securities and Investments Commission (ASIC) recently releasing Consultation Paper 332, which seeks to identify the issues and impediments which impact the supply of good quality affordable personal advice.
HUB24 is committed to investing to develop core data infrastructure for the industry. From our discussions with licensees, it has become clear there are many other challenges faced by licensees, brokers and advisers that can be solved through leveraging our technology and data expertise.
This led to the announcement last month that HUBconnect will be repositioned as HUB24’s data and technology services business unit within HUB24, which will sit alongside the HUB24 platform. HUBconnect will deliver technology and data solutions which enable practices and advisers to operate flexibly within their own business structure, while also supporting the compliance requirements of their licensee and enabling the delivery of cost-effective financial advice.
Going forward HUBconnect will also encompass data and technology solutions for brokers provided by the business is formally known as Agility Applications. As an industry, we have an obligation to our customers to work together to solve these key challenges and provide solutions that fill the gap left by those large participants who are exiting the industry, supporting licensees with compliance and governance to enable the delivery of cost-effective advice.