abrdn executive adviser Jason Nyilas said the proposed shift from a prescriptive ‘best interest’ duty to a principles-based ‘good advice’ duty for advisers would remove significant roadblocks to providers who were waiting in the wings to provide Australians with digitally delivered advice and investment solutions.
abrdn believes the future of digital advice is bionic advice which combines the power of an artificial intelligence-driven digital advice process with human adviser interaction. However, efforts to develop a bionic investment advice service in partnership with HUB24 have been delayed because of concern advisers that use the service may not satisfy the ‘best interest’ duty to clients.
Mr Nyilas said if the QAR recommendation for a replacement ‘good advice’ duty was introduced obstacles to introducing wide-ranging bionic advice solutions that abrdn has successfully operated in the UK for several years could be more easily replicated and implemented into the Australian market. Existing hurdles would be largely removed through QAR’s reforms to reduce regulatory complexity.
In addition, Australian superannuation funds, which have a responsibility to formulate retirement income strategies for members under the recently introduced Retirement Income Covenant, would be able to more easily harness bionic and other digital advice strategies to satisfy this requirement at a lower cost to members.
“If the proposed QAR recommendations are introduced it will streamline and accelerate the introduction of digital advice in Australia and play a major role in reducing the advice gap and lead to better informed financial decisions for many more Australians,” Mr Nyilas said.