Robo-advice can’t service emotional needs

23-Nov-2015

By Darin Tyson-Chan

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Financial advice would never be fully automated as robo-advice could not satisfy the emotional requirements of individuals making significant financial decisions, a senior financial adviser said last week.

Praescius Financial Consultants director Eleni Michael used her recent experience helping a client decide between acquiring a property on the Sunshine Coast or one in Melbourne to illustrate this point at the  FPA Professional Congress 2015 in Brisbane.

Michael said from a purely financial perspective the Melbourne property would have been recommended, however, her client described the Sunshine Coast house as a dream home.

As such, the final recommendation was to purchase the Queensland property as that was what would give the client the greatest happiness.

“We’ve been hearing a lot about robo-advice and how that’s going to shape our profession,” Michael said.

“I would suspect the [robo-advice] recommendation would be that the Melbourne property would be the one they needed to take, but the difference is there’s no one at the other end to see the disappointment on their faces when Melbourne’s presented.

“There’s no one to talk to them about what their real motivation is, what their true dreams are, and also to tell them that it’s actually okay to make the decision that’s going to make them happy.”

She stressed that decisions that made clients happy should never be underestimated, even if they did not fall in line with a choice based on more accepted financial criteria.

“When you understand [the decision] and you’re happy with it, that is the time you stick to strategies, and we all know the long-term strategies that you stick to give you [the desired] results,” she said.

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