We heard a lot this week about terms such as innovation, ideas boom, start-up accelerators, investor incentives and STEM as part of the Government’s $1.1B innovation agenda. But what does it mean for financial advice and advisers?
As part of the announcement, we had a core part of the Government in our offices at Stone and Chalk, adding a little bit more colour to the recently announced Innovation Agenda. The residents, including ourselves, had the opportunity to talk one on one with the Prime Minister and his team about how their businesses are helping both industry and consumer.
Scott Morrison (Treasurer), Malcolm Turnbull (PM), Wyatt Roy (Assistant Innovation Minister) and Kelly O'Dwyer (Assistant Treasurer) in Adviser Ratings Office, Stone and Chalk on Tuesday, 7 December.
So what does this #ideasboom mean for you, your business and your clients?
1) Better Technology - with the announced measures (such as US style bankruptcy protection for startups & $8M invested in new technology accelerator programs), startups in the fintech space are now more incentivised to create technology for how you run your financial planning practice, better evaluate investments/research and add value to your clients more cost effectively. We are aware of more than a dozen startups, including ourselves, that are creating technologies specifically to assist financial planners in better servicing their clients.
2) Better Use of Data – the government is opening up access to data for private enterprise. Adviser Ratings is already making use of this transition with the licence provided by ASIC for enterprises to make better use of and build on the ASIC adviser register. Access to data allows businesses to create better personalised or informational experiences for consumers – this is something you as an adviser or as a licensee should be investigating or partnering with organisations that do. At Adviser Ratings, we are using data to help rebuild a level of trust for the consumer in financial advice. With the information gleaned from the ASIC register and other government data sources combined with thousands of consumers opinions, Adviser Ratings is now empowering both the industry and the consumer. Other obvious applications include better design of financial products to deal with customer behaviour and risks, and better targeting of products to the right consumers.
3) Investor Incentives – a key part of the innovation agenda is the incentives given to investors. In certain eligible early stage companies, a 20% non-refundable tax offset on investment capped at $200k per investor, per year and a 10 year capital gains tax exemption for investments held for 3 years. We would encourage all licensees/trustees to investigate this option from an APL perspective, particularly for planners of sophisticated investors.
A big advance on a much broader scale is the announcement by First State Super to partner with VC fund, H2 ventures, in a $250M partnership to explore investment by its Super fund in early stage start ups.
Meanwhile, Adviser Ratings will continue to build both a consumer and adviser platform that will make it easier for both sides to connect - and where as much information is put into the hands of consumers to help with their decision making. As a fintech, we are continuing to invest heavily into the platform at Adviser Ratings.
By Angus Woods, MD, Adviser Ratings