View more on these topics

How will automated advice impact recruitment?

Financial advice-planning-advice-cashflow-analysis

The industry is constantly discussing the implications of automated advice but one area that has not had much attention is the potential impact it could have on adviser recruitment. Intelliflo’s recent white paper, Growing Your Financial Advice Business – the Hybrid Model, sheds some light on this.

The report says many advice firms are finding it is not feasible to grow their business by employing more advisers within a traditional face-to-face service model.

Firms looking to grow by increasing adviser numbers are up against a shortage of qualified advisers and, as such, those experienced enough to tick the
right boxes can be highly selective. Firms that cannot attract those advisers may struggle with the slow process of training unqualified or inexperienced staff to the required level.

The paper suggests a hybrid of automated and traditional face-to-face advice is the model of the future. Growth is achieved through long-term relationships with clients who progress from automation to full advice when their wealth increases and their needs become more complex. If this turns out to be the case, the opportunities and career structure for advisers could look very different.

Intelliflo founder and executive chairman Nick Eatock says: “Automation helps to bring advice to a level of customer that has not been able to benefit from it before. It makes advice more economic for both the adviser and the customer. The opportunity lies in giving customers access to an adviser who can help them with more complex issues that automation cannot deal with yet.”

Intelliflo’s report states: “The advance of technology, driven by client demand, offers an opportunity for a younger generation of advisers to cut their teeth in the industry with clients who want to start out with a light touch, automated approach to investment.”

So a clearer career path could emerge where trainee or newly qualified advisers initially gain experience with clients starting to upgrade from automated services. The newer adviser could then shadow a more senior one who deals with more complex issues, before gradually moving on to dealing with complex cases themselves.

Financial services specialist Heat Recruitment managing director Steve Preston says: “A lot of the work being done by trainee advisers could be done by automation, releasing the trainee to support senior advisers. While automated services may provide an efficient and cost-effective alternative to hiring advisers to handle smaller- net-worth clients or those with simpler demands, the higher-net-worth and more technical clients looking for a really bespoke service will want to be dealt with by a knowledgeable, personable adviser who can handle their situation with a personal touch. There will always be a place for face-to-face advice.”

Adviser view: Chris Daems, director, Cervello Financial Planning

Chris-Daems-against-stone-wall-in-2014-700.jpgRecruitment is a challenge and finding the best people to join our team takes time. However, most financial planning business owners I speak to believe recruiting the right people slowly is better than rushing towards growth with the wrong team.

I am an advocate of the “grow your own advisers” approach: recruiting young people and developing them. The report makes a fair point about the time it takes to recruit, train and support these team members but it is important to remember many of the business that aspire for longer-term growth are prepared to make this commitment.

The “hybrid” business model is a compelling way to build a firm. What the report seems to ignore, though, is that any automated advice offering needs time, effort, energy and potentially cash in order to build enough scale to be a worthwhile investment.

I am not suggesting automated advice will not play an important part in the market. It will. It’s just that a lot is involved in promoting such a proposition.



PFS chief: Cost of regulation threatens advice firm success

The results of our latest survey of personal finance professionals across the UK, released last month, revealed increased concern regarding the impact of regulatory costs. For the fifth year in a row, regulation and compliance costs have been identified as a key threat to business success, restricting access to advice and adding complexity for consumers. […]


The advice price tag: How do advisers prove their worth?

  Advisers are striving to demonstrate they deliver value for money amid the glare of negative publicity on charges and greater scrutiny by the FCA. Firms are trying to meet the challenges of building a sustainable business for the future, calculating how advice charges should be structured, justifying their fees and ensuring the services being […]

Nick Eatock: How to beat the robos

The other day I came across the new words added to the Oxford English Dictionary in 2016: scrumdiddlyumptious, slacktivist and Foggy Bottom (I kid you not) are all there. But the word I was expecting to see – robo-advice – was not. Surely one of the most used terms in financial services this year, it […]


News and expert analysis straight to your inbox

Sign up


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

  1. Christine Brightwell 25th January 2017 at 12:19 pm

    Automated “advice – lets de humanise the whole system. Who needs names when we can all just be numbers – particularly those with small funds to retire upon. Who cares if people do not really understand what the automatic “advice” means in reality. And yes I am feeling very cross this morning

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm