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New robo-advice service fails personalisation test, advisers say

LV= and Wealth Wizards combination can help cut adviser “grunt work” but concerns remain over personalisation

An automated advice service has been criticised for a lack of personalisation in its reports as advisers are being encouraged to be open to the efficiencies such technology could bring to their businesses.

Robo-adviser Wealth Wizards launched its “robo-paraplanner” offering last week. The robo-paraplanner, which was piloted by LV=, will generate an automated advice report in under a minute.

The fact-find is undertaken either face-to-face, in a branch or over the phone and, afterwards, the robo-paraplanner tool produces an instant document for the adviser to recommend to the client before completing the case.

Wealth Wizards chief executive Andrew Firth says, in LV=’s case, the whole advice process was reduced to approximately two hours. He says Wealth Wizards considers a typical at-retirement case takes around seven to 10 hours to complete otherwise.

The offering was met with initial scepticism, with adviser commenters on the Money Marketing website questioning if the proposition could deliver everything it promises.

Cutting the “grunt work”

However, Apfa director general Chris Hannant supports the automation of the advice process saying these offerings will help advisers be more efficient and take away some of the “grunt work”.

While emphasising that automated solutions have to work properly, Hannant says: “The plus for me about this process is it has got the person at the front and the end so there is that backstop in terms of things potentially going awry.”

He adds: “Becoming more efficient and lowering the cost to the client should be something firms are seeking to do because it will make the market bigger and means that they are better placed in terms of offering better value for money. I would expect to see over the next few years more things that automate bits of the process.”

Cervello Financial Planning director Chris Daems agrees advisers should always be looking at how they can make elements of their business more efficient.

He says: “I believe we’ve still got a decent amount of innovation to come in the next few years and I’ll be interested to see what alternatives come to light in this space.”

Money Marketing has seen a sample advice report from the robo-paraplanner which runs to 17 pages. The report includes information on the recommended product, products that were considered but not recommended and the client’s risk profile and priorities.

The front page of a sample report from the LV= service

Syndaxi Chartered Financial Planners managing director Robert Reid criticised the report for its lack of personalisation, however, which he says is hard to achieve through an automated service.

He says: “One of things with having an automated system is you end up writing the equivalent of sound bites because it is the easiest way to [piece] it together. It is very impersonal. “

Reid adds: “You have got to accept you will not be able to do personalisation and because of that the style of writing will be quite different. If you don’t want to personalise things but you don’t want it to look very stilted, you have got to go for a far more casual style.”

A Wealth Wizards spokeswoman says: “The regulated advice produced by the robo-paraplanner is absolutely personalised. Like any suitability report, the report contains some content that is standard (e.g. explanation of advice fees) and information relating to the recommendation (e.g. features of the recommended product).  Pages 9-13 however are all personal to the individual and their circumstances, as is the recommendation. It is also worth adding that we work alongside advisers to produce the reports.

“The report contents and layout are designed to LV=’s requirements and we would fit this to the ‘house style’ of any organisation we work with.”

The spokeswoman adds: “The robo-paraplanner actually allows the advisor to edit the report for personalisation prior to sending it out to the client. This is a key aspect of the solution with regards to retaining the human element and demonstrates how technology and advisers are working together to both save time and ensure personalisation.”



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