Advice engagement will be real robo test

Robo advice providers should seize the chance to engage millennials

09-Feb-2017

By Daniel Paperny

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Generational differences in the way clients seek advice would be a key catalyst for new digital entrants to capitalise on the growing millennial market by tailoring their models to the next wave of Australian investors, according to white-label digital advice provider Quantifeed.

Speaking to financialobserver, Quantifeed senior executive for strategic partnerships in Australia Graeme Brant said that while millennial investors were typically fee conscious when it came to seeking advice, the real test of digital advice providers in Australia would be the extent to which they could bridge the accessibility gap and draw in new client segments.

“Millennials are seeking digital services associated with every aspect of their life and don’t see wealth management as being any different,” Brant said.

“If they could receive financial advice from a human that is appropriate to their budget, then many would be open to it, but digital is certainly opening the gap … it solves the need for something that they normally wouldn’t be able to access.”

Digital wealth management tools should not be regarded as a threat to existing advice relationships, but should be viewed as a way to enhance those relationships, particularly as more digital advice providers partnered with incumbent financial institutions to leverage their strong client books, he said.

“We certainly don’t see in the near term that smarter technology and artificial intelligence will sideline advisers. It’s still just a tool that they can harness to provide a better and more efficient wealth management service,” he noted.

“I think the personal touch that you receive from a human adviser can’t be replaced by artificial intelligence or smart algorithms. What I think that the increasing rollout of technology can do is increase efficiencies and free up the adviser to work on the high-value aspect of their client relations.”

He noted the changing focus of Asia-Pacific financial institutions, which were transitioning away from servicing their existing private banking distribution channels towards the provision of “efficient, scalable, right-priced advice in a digital sense”.

“We’re seeing a real focus among financial institutions in the region on the mass-affluent client segment. They see digital wealth management as a great opportunity to develop new distribution channels,” he said.

“All these financial institutions are now looking closely at how they can provide digital advice offerings to customers … these customers can be provided with wealth advice [that] is personalised, engaging and suitable to their risk appetite … in a way that from the institution’s perspective is efficient and profitable, opening up a whole new business segment for them.”

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