National advice firm LEBC says robo-advice solutions lack to ability to provide strategic advice and will not fix the widening advice gap alone.
Speaking to Money Marketing, LEBC director of public policy Kay Ingram says robo solutions are still lacking sustainability.
A bionic approach that combines the technological benefits of robo with face-to-face advice could help clients feel more secure, Ingram adds.
She says: “Robo is often very technical and difficult and its very clear that human emotional intelligence is needed as part of the advice service. A bionic approach means technology and artificial intelligence are used to do the analytical processes and the basic underlying work, but clients are still able to benefit from a one-on-one relationship with an adviser.”
Despite the popularity of rob- advice, an automated investment services review released by the FCA in May this year suggested the market is still having teething trouble.
The regulator highlighted a number of shortcomings around suitability, identification of vulnerable clients and fee disclosure along with a promise to keep a close eye on any plans robo-advisers had to extend their remit.
Ingram says: “Robo can be good for encouraging people to invest who might otherwise not, and so it is good from the view that it gets people saving. It can’t do the job alone however, especially when it comes down to the strategic side of things.
“With bionic advice, consumers can test their understanding of what technology has told them with a human adviser, who can then work out exactly what is important to each individual before giving them advice.”
Money Marketing reported in September that Thame-based IFA Candid Financial Advice has seen positive results from using a bionic advice approach.
The firm uses mostly technology to service clients along with remote support of advisers and has exceeded £100m in client funds under advice in its first five years.