One in five financial advisers are set to launch robo-advice
Financial advisers are starting to change their attitude towards robo-advice.
Nearly 20 per cent are planning to implement a robo-advice platform in the future or are in the process of incorporating automation, while just 2 per cent have already done so, according to a survey from Panacea Adviser.
However nearly 66 per cent of the 104 respondents have not yet decided if they would use robo-advice.
Last year the survey found that 89 per cent of advisers thought that automated wealth technology was a threat to traditional face-to-face services.
Derek Bradley, chief executive at Panacea Adviser says while digital automation is new, it’s interesting to see how much interest there is among traditional advisers. However, he says there needs to be more of a distinction between guidance and financial advice, which most robo-advice platforms don’t offer.
“For robos to really take off, I would argue that the word ‘advice’ needs to be replaced with something more along the lines of ‘guidance’,” he said. “And hand and hand with this, the FCA needs to step in to approve any robo models as fit for their defined purpose before launch, meaning that if the algorithms behind any piece of robo technology prove to be wrong then the approving regulator would be responsible and not the adviser. Without all these ducks lined up, robo is highly likely to fail.”
Advisers who were surveyed felt that time and cost savings were the most popular benefits of digital advice. Some still had concerns about the technology, mostly around the blurring between advice and guidance and miss selling.