Corruption, mistrust and opaque fees are just some of the problems robo-advice may help solve for Australian investors, says Bernie Ripoll, former Member of Parliament and director of MapMyPlan.

Ripoll is sometimes known as the "father of FoFA" (and not always affectionately) within financial adviser circles, for his work that ultimately led to the Future of Financial Advice legislation.

FoFA reforms led to the banning of commissions on investment advice, and paved the way for the Life Insurance Framework, which is gradually reducing the upfront commission-based fees for life insurance advice. These have proven unpopular with some parts of the financial advice industry, for obvious reasons.

Before politics--Ripoll was Shadow Minister for Financial Services and Superannuation and Member for Oxley, Queensland--he was at university with Paul Feeney, co-founder of digital advice platform Map My Plan.

"Through that period of Storm Financial and post-GFC, we talked a lot about what, in a perfect world, a good advice plan would look like, and how people with a plan do better than those without," he says.

Feeney ultimately found himself in a position to assemble that start-up, Map My Plan. As both Feeney and Ripoll explain it, this is a platform that is trying to change the link between advice and product. "Map My Plan focuses entirely on advice and zero on product," Ripoll says.

In an earlier conversation, Feeney told Morningtar.com.au, "We want to change the statistic that means only one in five Australians access financial advice".

Map My Plan enables you to set various savings goals, track existing investments and it can also make recommendations about what level of life insurance might be appropriate. If you have more complex requirements, such as trustee entities or other structures, "you're probably still going to need some external advice," Feeney says.

Feeney emphasises the platform doesn't sell any financial product--something he believes is a detrimental fixation of the industry.

"As far as we're concerned, we're influencing people's behaviours on a product class, such as whether they should have insurance or not. We're not saying you should have xyz-branded insurance, though. We then work with individual users, who can go on and build their plan."

"Financial planning has an awful lot of variables to get someone on the right financial path, but if you ask someone five or six questions, half the information you get means a financial planner is no longer relevant. And you ask another five more, and you find the right path is bleedingly obvious," Feeney says.

However, this platform does have its own Australian Financial Services License and is fully compliant with legislation.

"We don't shy away from personal advice," says Ripoll.

"It's the technology that provides the advice--it's a self-directed digital advice platform ... a piece of technology that gives you personal advice based on your circumstances, just like you would with a human financial adviser."

He refers to the Australian Securities and Investments Commission's (ASIC) recent landmark case prosecuting a financial planning licensee found to have breached FoFA's best interest provision.

"It's really significant, because it sets up some fences and makes it clear what [advisers] can and can't do, a test case to help people comprehend what it means," Ripoll says.

Machine the only one who measures up

The far superior mathematical and other processing power of digital platforms is also emphasised by Ripoll and Feeney.

The above headline is a quote attributed to celebrated science fiction author Isaac Asimov who, like Ripoll, held strong views on technology and its role in helping rather than hindering humankind.

Asimov often spoke of what he saw as the "low efficiency" of the human mind, with "20 per cent the figure usually given". Ripoll seems to echo some of these sentiments when he says "where the technology possibly has an advantage is it can take every piece of relevant legislation and instantaneously apply that, something that a human being isn't able to do instantly".

"No one should fear technology, because if the algorithm and the system that's providing the advice is written well and is a good quality product as a service, then you're going to get good advice," says Ripoll.

"Because technology is not conflicted, the technology is not going to try and sell you anything, it's not biased. It's only responding to the information you provide ... [about] your circumstances, how old you are, how much you earn."

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Glenn Freeman is a senior editor at Morningstar.

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