“I’ve got a simple crusade,” the director of Wealthport, an online investment management platform aimed at independent financial advisors, tells Moneyweb.
“It’s how do I get good quality advice to anyone, anywhere in South Africa at the best possible price?”
He recalls how his father, a health inspector from a small town who didn’t retire with a lot of money, was exposed to the advice of a short-term insurance and life broker.
“Why should a millionaire in Joburg who can afford to lose money have okes crawling all over him charging the lowest advice fee? He gets the best advice. He gets access to the best products. He can afford to lose money, but my father who retires with nothing gets shoddy advice, pays premium for it and the chances of him losing capital are high.”
He likens a transparent, simplified experience where clients’ interests come first to a trip to Woolworths. Despite not having lots of tomatoes or bananas, the company takes responsibility to ensure that the ones they do offer are ripe and fresh and have gone through a vetting process.
The future of wealth management will be similar to the private banking model, Maree predicts. Clients don’t see their private banker that often, but can rest assured that there is someone that would be able to sort out their queries. For everything else they go online.
Technology provides the industry with a vehicle to change advice for the better. The role of the advisor will be to manage human behaviour and technology will take care of the rest, he says.
“Advisors are looking at technology like it is going to take their business away. Yes, it will take the weak advisor’s business away. The guy that adds no value or the guy that just goes and ‘smouses’ stuff or tries to lie to clients.”
But for advisors who provide clients with appropriate advice and who care about them, technology would provide a tool to help keep score and to collaborate with clients to make better investment choices, he adds.
“Face-to-face [advice] is not going to be the convenient model going forward. People still want the human touch, but the future is about tech and touch.”
The problem with technology on its own and the reason why robo-advisors are battling is because the cost of client acquisition is huge, he says.
“If you have to go and get clients, you have to advertise. To get them to come on board is a big cost. Now advisors already have the trust of their clients.”
Although Wealthport, majority-owned by the Telesure Group, has the Lisp (Linked Investment Service Provider) license required to transact, it is effectively a tech solution to financial planning.
Independent advisors can only negotiate so well for themselves, but through the scale of its platform, Wealthport uses bulk buying power to negotiate a better deal. The platform is primarily aimed at advisors who run model portfolios or who use wrap technology. In most cases, it effectively offers advisors free planning portal technology via the use of the platform, allowing them to include an online service as part of their offering.
Advisors would be able to phone a client living in a rural area on Skype, do a screen share and a comprehensive review, without the client having to see them face-to-face.
The “fund supermarket” model is not where the platform should stay, Maree argues. By providing the right technology on the front end, the platform can effectively create a transactional portal that allows clients to do planning, reporting, scenario evaluation while also transacting from the same environment.
“I think the opportunity for me was how do we build a business that is going to encourage independent advice, real independent advice? When I say independent advice, it is not just talking about which unit trust, but which investment vehicle. So maybe it is not a unit trust, maybe it is an ETF. Maybe it is not an ETF, maybe it is a structured product.”
The problem is that the industry is set up in a way where powerful firms have vested interests in product lines, he says.
“You may have been a star fund manager, suddenly you have the most credibility in all aspects of financial planning. That is not entirely true.”
The idea behind Wealthport was building a platform that offers access to all these products that are of value.
“We are indifferent to the assets you buy. We make our money out of administration.”
Through the portal, the financial advisor’s clients can also gain access to their own personal profile, which sets out their overall financial situation, thereby effectively becoming a tool for collaboration.
Maree says financial advice is not going to disappear. Technology will just become a tool to service more clients for less.
But it will also allow investors like his father who live in small towns to have a dashboard with an overview of their financial situation, including the growth of their assets and the fees they paid.
Maree’s outspoken approach to some of the practices in the industry is bound to ruffle feathers (“[bespoke] share portfolios are the rich man’s scam”; “these life investment products, some of them are complete shockers”; “I think performance fees are a con”), but he is unapologetic about the fact that South Africans anywhere in the country should have access to good quality independent advice at the best possible price.
“For me, this outcome, we will do it, that I will guarantee you. We will change it and we are not going to be the most popular guys because we are going to make transparency everyday normal.
“I owe it to all those people that live in small towns or live anywhere in South Africa that are being prejudiced by poor advice, by people who may not be keeping up to speed, who are not doing what they should do to take responsibility for those people’s money.
“So through technology we will hold them accountable.”
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