Mercer is looking to step up its scaled advice offerings, whilst touting the superiority of the industry fund sector in delivering low-cost, targeted advice.
Speaking at the Industry Super Network’s Financial Advice in Super Symposium in Melbourne this week, Mercer’s financial advice leader Jo-Anne Bloch said one of the great benefits of Future of Financial Advice (FOFA) changes is addressing the shortcomings of ‘one size fits all’ advice.
“We know there is considerable demand for low-cost advice and we know the financial advice sector has failed in delivering it,” Ms Bloch said.
“It has delivered high-end, complex advice to people who have wanted simple, straight forward questions answered. You, in the industry fund movement, have narrowed that gap, you’ve delivered great low-cost advice, simple advice, demand driven advice, and I think the gap will close in terms of which sector provides what sort of advice,” she told delegates.
Ms Bloch said Mercer is seeing a big shift not just in demands for advice but in the advisers it was employing, with a reduction in the number of advisers who are giving high-end advice with the real growth at the low-cost demand end of the spectrum.
In an effort to deliver more low-cost advice, late last year Mercer asked all its financial advisers to be able to give any type of advice on any particular issue at any point in time – provided they have the right regulatory underpinning and fee structures.
“We started this process at the end of last year and the area we’re really focusing on is not necessarily our phone based (offer),” she said.
Mercer found that in delivering advice to the workplace, it found its consultants giving general advice were inhibited in being able to migrate that advice to provide personal advice or seamless advice on a range of topics.
“So we’ve converted our workplace advisers to both education and advice experts, who can pretty much cover off the whole spectrum,” Ms Bloch said.
Mercer has doubled the number of advisers it has in the workplace because they will actually be education and advice consultants, and will be able to offer statements of advice (SoAs) on the spot thanks to an upgraded technology offering.
“Our compliance teams are grappling with this as we speak, but they’re trying to move with the times and be practical about it. But what a great experience when you see people in the workplace and you’ve just had an education seminar and you’re doing a one-on-one, and that adviser can actually talk to you about anything and everything, charge you the appropriate fee, and then generate the SoA on the spot,” Ms Bloch said.
“I think this is the really exciting part of FOFA. Getting out and giving people the right advice for the right fee from the right person with the right regulatory framework.”
