10 questions with broker Mark Miller

Mark Miller of Aim Financial Services discusses the proposed regime changes

10 questions with broker Mark Miller
Mark Miller of Aim Financial Services – mortgage and insurance broking specialists – discusses the proposed regime changes that kick off from May 2018 and his thoughts on the relevance of personalised, face-to-face advice.

1. How do you think the new regulatory changes will affect your brokers?
I believe for the most part it will be business as usual. At Aim, we already provide comprehensive ongoing education for our team, and we’ll continue to do that.

2. Do you think brokers are prepared for the changes?
Not yet. There’s been a lack of information, conflicting rumours, speculation and confusion about the proposed changes. That said, the update released last week (from the Financial Markets Authority) has relieved a bit of stress, especially around timelines.

In general, the good operators in the industry offer professional, ethical advice that’s always in the client’s best interest. The introduction of legislation to mandate this will simply be a procedural step for those advisers.

3. How can providers and the industry better support brokers?
Treat advisers more like business partners. Actively engage with those at the coal face when it comes to policy making, so everyone gets a better understanding of the ramifications of their actions. Foster open communication channels between all stakeholders to facilitate better service to clients, through clearer understanding of legislation and policy.

4. It will be three years in the making, from May 2018 to May 2021, before all the changes are enforced. How do you think this will affect workflow?
At Aim, we don’t see any significant changes to work flow over the next three years. Advisers will take time to gain the required qualifications, but with the opportunity to do distance/online learning, the downtime will be minimised.

There will be positive changes in the client application processes from what we understand. Clients will have greater confidence in who they are dealing with, and can be comfortable in their decisions, as more time will be dedicated to compliance.

5. MBIE and the FMA promise that the changes will make NZ’s financial markets safer and that the average person will receive better financial advice. Do you agree? If yes, why?
I agree with the sentiment of the proposed changes, but some of the plans are conflicting. Take robo-advice for example; the proposed changes are intended to make advisers more ethical and their advice “safer”. However, the introduction of automated systems will remove personal and meaningful “advice”. Is this safer or better for the client than what they are currently receiving?

That said, while the financial advice given may not necessarily be better for the average person tighter controls on who can give advice should give clients greater confidence in their decision making.

6. What do you think of robo advice/digital advice?
Robo-advice is an oxymoron. Automated systems cannot offer advice per se, it simply digests the information, correct or not, and out-puts a predetermined verdict. Robo-advice fails to help clients clarify the meaning of questions, or offer a deep understanding of what their options are and the ramifications of their decisions.

Allowing clients to be fully informed and supported throughout the process must be the priority and I don’t see how robo-advice can do this effectively as an end to end solution for clients.

7. Will you be relying on the FMA’s exemption?
Aim doesn’t see robo-advice as an immediate threat as others in the industry may do. Instead, we see a significant opportunity for robo-advice to bring tangible benefits to our business. Speed and accuracy of feedback and response tied together with personal, individual advice will be advantageous to the clients and should lift revenue for the adviser if deployed properly.

Coming from an IT background, I advocate for digital innovation and involvement in our business. At Aim, we’re continually searching for that piece of the puzzle that will cause disruption. The ability to do our job better and faster cannot be ignored and robo-advice may be that tool.

8. Do you think robo advice will replace brokers?
The stakes are too high for robo-advice to completely replace advisers – there is a person at the end of this transaction making what could be the biggest decision of their life. That vital and personalised service will be difficult for a computer to replicate.

We have developed a set of values in our office called the “Aim Way”. In part, this ethos is about people, delivering high quality personalised interaction at every stage in the process with a strong focus on delivering what is best for the client. The best client engagement I have is when I personally meet with clients. Building up trust, empathy and a general understanding of their life and aspirations allows me to provide the best advice possible. I feel computers have a long way to go to replicate this.

9. Do you think robo advice is a good idea?
I feel that robo-advice has its place in my business, but currently only as a support to personalised adviser services to produce efficiency and better outcomes for clients and consumers. I am also certain that robo-advice will be a tool that will create a step change in our bottom line.

Is robo-advice a good idea if being delivered directly to clients? No. Full reliance on robo-advice is not a good service for the average person. I’m sure most advisers will agree that the continually evolving policy landscape is throwing up deals that are more and more complex, with vanilla or clean-skin deals becoming less frequent. The ability, for now, to disseminate this information and effectively present a successful application is a skill currently limited to real advisers. My clients want to deal with someone who they can trust. For now, this can’t be achieved via automated systems.

10. What’s the biggest challenge for brokers in 2018.
Keeping up with legislative changes and supplier policies to be able to effectively communicate with and educate clients will continue to be an ongoing challenge for everyone in the industry.

With mortgage advisers make up a small proportion of the mortgage market, we run the risk of being marginalised or pushed out. Making sure that we have a voice, and a loud one, over the next 12 months is going to be vital to making sure the new framework is effective and workable. For Aim, we want to continue to grow our team and finding good people is a challenge. We offer excellent training and mentorship for our junior brokers and believe our culture will bring out the best in anyone new to the industry.

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