The advice gap is more of a structural problem than an industry one, according to Mark Sanderson, managing director of Morningstar Wealth.
Speaking to FT Adviser, Sanderson said advisers are part of the advice gap solution but do not get enough credit for the work they do.
And solving this issue is more complex than just needing new advice firms and more advisers to enter the profession, he said.
The Dubai-based director told FT Adviser: “When you hear the government talking about the advice gap it sounds like it is an industry problem but it is more structural than that.
“It is hard to set up as a new advice firm but new firms are not going to solve the advice gap.”
Sanderson said he wants to see policy makers give more recognition to the valuable work done by advisers.
He added: “At Morningstar, we want to serve investors and we believe we can do that through great advisers.
“I would like to hear more people say advice is a profession which adds value to people's lives.
“This is what is missing from the discussion about the advice gap and I would like to see more of that from policy makers.”
Advisers are cautious of AI
On the subject of artificial intelligence, Sanderson said there is the opportunity for advisers to benefit from this kind of technology, but it will not be something they will be thinking carefully about how to leverage.
He said: “If you’re trying to create scale in your product I think there is an opportunity in AI, but whether it will be a wave that is going to crash over the industry, I am sceptical.
"Advisers are very thoughtful of their customers and will be thinking about how new technology would impact their customers’ experience.
“[Advisers] will be thoughtful about how they leverage new technology.”
This sentiment was echoed by Daniel Needham, Morningstar’s president and chief investment officer.
He said: “It is always hard to predict what is going to happen with AI, but generally technology diffuses slowly through an industry.
“Technology is going to be an enabler of the incumbents rather than a disruptor.”
Last week, Needham told a Morningstar conference that while increased regulation was becoming a barrier to new advice firms entering the market, it could be positive for existing firms who would have to compete with less competition.
He said: “A lot of regulation isn't influenced by the size of your practice so these are fixed costs. Whether you're a one person shop or just starting out.
“This fixed cost is a barrier to entry, it prevents new entrants, because they need to come up with [the money] before they can actually open the shop.
“One of the unintended consequences of these regulations will be fewer new entrants.”
tara.o'connor@ft.com
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