Advisers are concerned banks’ robo-advice plans will see a return to the misselling issues of the past as Barclays explores the launch of a hybrid advice offering.
Money Marketing understands Barclays is looking to set up an advice proposition that would include a face-to-face element and an online offering.
It is understood the service would be a general financial planning offering covering the whole of a customer’s finances, not just investments.
In November, Barclays overhauled its stockbroking arm with the launch of a direct-to-consumer platform, Barclays Direct Investing.
A Barclays spokesman says: “The launch of our new direct investing service at the end of 2016 was the first step towards a suite of new services that will help address the savings and investing knowledge gap in the UK. We are unable to share any further details at this stage.”
Other banks looking to launch robo-advice offerings include Lloyds Banking Group, Royal Bank of Scotland and Santander.
Rowley Turton director Scott Gallacher is sceptical of banks launching advice propositions without full consideration of the market.
He says: “The problem is the banks have jumped in and out of various markets as and when they think they are profitable.”
The Lang Cat consulting director Mike Barrett says, while banks have been fined in the past for unsuitable advice, automated processes can remove human error.
He says: “The difference is this time a lot of these solutions will be systemised. A robo system removes the human element. The system should be removing a lot of the causes of the failures that existed previously.
“The only flipside is, if the system itself is wrong there is a danger you are systemically misselling across the board rather than just on individual cases.”
Informed Choice managing director Martin Bamford predicts successful robo advisers in the medium term will combine face-to-face services with technology, like Barclays.
He says: “We are not yet at the stage where robo advice is delivered by robots or actually gives advice, so until we have got real artificial intelligence it makes sense to combine it with humans who can empathise and relate to their customer.”