IFAs point to financial and operational barriers to setting up robo-advice
Just 3 per cent of advisers currently offer an automated advice service at their firm, but 14 per cent plan to in the next two years, according to research from JP Morgan Asset Management and Platforum.
A survey of 162 advisers, conducted by Platforum on behalf of JPMAM, found advisers who are sceptical of automated advice say such an offering does not fit their firm or is not suitable for their client profile.
Those planning to introduce an automated offering in the future say they want to improve or diversify their firm’s proposition and service smaller portfolios.
The survey also found that the biggest barriers to offering digital services in their firm are operational and financial. Advisers surveyed say the time needed to carry out due diligence on these services is the biggest barrier, followed by security concerns, integration challenges and cost.
Discussing the research at the Money Marketing Wired live panel debate today, JP Morgan Asset Management managing director Jasper Berens said now is a “golden age” for advice.
He said: “There is strong evidence the regulator is keen on trying to technological solutions to the advice gap and right across financial services. The advice gap needs to be solved by automation. There is an opportunity that is very ripe for significant change in technology. If that happens we should see real change from providers.”
Berens added: “It is a golden age for advice. You have got eight million investors through automatic enrolment. They will have a decent chunk of money and they will want some advice around it.”
The panel was asked where advisers should be investing in technology to make the greatest difference to their business with data being highlighted as a key starting point.
Intelliflo chief operations officer Rob Walton said the industry has a “massive problem” with its data. He suggested advisers need to clean their data first before they invest in technology.
Head of Platforum Heather Hopkins said it is important to keep in mind what customers want and First Wealth chartered financial planner Claire Phillips agrees advisers have to think about how technology will impact the client.