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Adrian Boulding: Robo key to advisers’ survival

Boulding-Adrian-2012-700x450.jpgLast month, the FCA released its findings from its review of automated advice providers. The results looked worrying for robos, with concerns flagged in the areas
of suitability and fee disclosure,
in particular.

But while it is clear some online players need to do a much better job, robos more broadly are far from being run out of town. Quite the reverse.

As the FCA states in its review’s preamble: “We want financial innovation in our markets to thrive where it delivers good outcomes for customers in terms of value, costs and choice.”

Ian McKenna’s review in Money Marketing earlier this year of Just’s online retirement income planning offering, Prime 2, seems to have found an effective middle way for robos. Prime 2 is designed to take the client so far but with assistance from Just advisers when they feel they need it.

Robo-rumble: Will FCA scrutiny stop digital services moving further towards advice?

Like all services run by computers, the real art is in creating a seamless hand-off from robot to human when the client is ready for it.

Trust is key. In the face-to-face world, this can be done relatively easily through story-telling and rapport building but it is not quite so easy online.

Robo users need evidence that illustrates how good a job they have done investing the money of people in similar positions to them. They need this reinforced with testimonials capturing positive personal experiences.

Young people are willing to share experiences online with their peers, so reputation can be built quickly if they are positive.

And which demographic is least likely to be prepared or able to pay the costs associated with traditional regulated advice today?

Young people.

They will be happier to start investing in a stocks and shares Isa via a robo service today, then, in a few years, once they are on a stronger financial footing and have objectives which demand advice, they will come to you for that.

So why not combine the two?

Will robo retirement advice stand up to MPs’ questioning

Recent research we carried out into millennials’ savings and investment habits uncovered some interesting findings.

For example, a large number of people in their 20s select financial providers based on the functionality and quality of their mobile apps.

The next generation of savers are going to be loyal to advice firms and providers supported by robo services that offer great experiences while meeting suitability expectations.

You can see how technology will streamline the two-way flow of information needed to build trust and ensure any investments are not out of step with a client’s risk profile or objectives.

Getting this right will create a virtuous circle of enhancing engagement and loyalty, making it easier to stay up-to-date with clients’ needs and objectives and therefore meeting the challenge that is strict regulatory requirements. This should give advisers more confidence in their proposition as a whole.

Adrian Boulding is director of retirement strategy at Dunstan Thomas


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There is one comment at the moment, we would love to hear your opinion too.

  1. William Burrows 4th July 2018 at 9:30 am

    I think robo is fine in theory but hard in practice.

    I have noticed a bit of a disconnect between those with actual experience of dealing with clients and those who do not. (not the case with Adrian)

    I have clients at both ends of the age spectrum and if there is a common denominator it is the need for someone to explain in plain English and without jargon what the options are.

    If only it was as easy taking what works in other walks of live and applying it pensions and investments!

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