Last week I found myself on the phone to one of my favourite industry commentators. This person and I have known each other for more than 20 years, from back when I was a rookie reporter at Money Marketing.
Now that I am no longer living in London we talk less often and probably only see each other once every two or three months.
But I still find talking to this person helpful – and challenging – in terms of how to order my thoughts. Last week was a case in point: at one point, apropos of nothing much in particular, this person asked: “Have you ever written something and regretted it afterwards?”
My first instinct was to say no, I have never regretted writing anything. After all, I have, happily, never punted products to readers that blew up in their faces five or 10 years down the line. Almost all of my calls, from mortgage-linked endowments to expensive personal pensions, passing via PPI products turned out to be right.
But after I put the phone down, two thoughts occurred to me. The first is it is easy for a journalist not to get things badly wrong, mainly because most of the time we are warning people against making mistakes, not encouraging them to make potentially momentous decisions.
It is one thing to point out that unless you have a damn good idea of what you will be doing most of your working life – with no expectations of divorce, unemployment or other potential human disasters – a product that commits you to making the same payment every month for the next 25 years is not a good way to pay off an interest-only loan. It is another thing to come up with the perfect alternative to meet that same need.
The other point is, as often as not, what sometimes lets down our writing is not the overall argument, which may well be right, but the use of an infelicitous phrase or the emphasis on an issue that, with hindsight, was probably not as important as we thought.
One example that comes to mind is a column I wrote last year about robo-advice. As readers will be aware, I have long been a huge fan of standardised financial advice, using technology to analyse financial needs and present solutions in a way that is objective and less subject to human error.
When discussing it 15 years ago, I spoke in terms of a “Snappy Snaps option”, with operatives in stores up and down the country running franchises that offered standardised advice to potential clients. More recently the argument has shifted to robo-advice, more or less the same process – only you get to wear your own suit.
My mistake, however, has always been to counterpose the process to what advisers do now – throwing a few gratuitous barbs into the mix, just to get everyone’s blood flowing.
When writing about Snappy Snaps 15 years ago, I said: “The only minor drawback is that were I running it I’d not want to hire 95 per cent of the current IFA population.”
And when discussing robo-advice last year, I wrote: “The real reason for the likely exponential growth of robo-advisers over the coming years is they are generally much more reliable than their flesh-and-blood counterparts. In a straight choice between humans and robots, the machines win every time.”
What I should have said was something different: the potential of robo-advice is it offers every adviser the opportunity to develop a business that meets the needs of a growing segment of the UK population for whom this is the preferred way of accessing financial services.
Crucially, this segment is no longer definable in terms of age, social class or even wealth. Whereas a decade ago it might have been possible to argue there was a dividing line between tech-savvy youngsters who were more likely to come from middle-class, affluent backgrounds, nowadays everyone has access to a smartphone and shops online.
Nor is the argument that the most affluent clients prefer personal to digital interaction sustainable any longer. As Intelliflo’s executive chairman Nick Eatock pointed out last week, almost two thirds of ultra-high-net-worths, as he called them, expect “all or most of their wealth management relationship [to be] conducted via digital channels” in the next five years.
Which is why the suggestion I saw last week that some 70 firms are road-testing a new robo-advice service called Advicefront, which incorporates financial planning questions, is so important.
Advicefront is backed by, among others, ex-Bloomsbury Financial Planning principal Jason Butler. Also involved are the risk profiling business Finametrica, the investment platform Parmenion, now owned by Aberdeen Asset Management, and paraplanning firm The Timebank.
If confirmed, this suggests that rather than comparing robo to human advice, the two can meet in the middle. The option of a service that shifts easily to meet clients’ requirements, be they for human contact or for digitally-based interaction, is now very real.
Perhaps it is time for advisers to start thinking about how to integrate robo-advice into their businesses – and for me to stop counterposing the efforts of thousands of advisers to a mythical future where that same work is performed only by robots.
Nic Cicutti can be contacted at firstname.lastname@example.org