Robo advice lacks substance


By Megan Tran

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Investment consultants NMG Group have claimed that while there has been much development in the robo advice sphere, the financial services industry has focused too much on the digital investment aspect and has yet to create truly useful robo products.

In a recent blogpost, the group said that though existing robo advice solutions addressed the issues of affordability and value, consumers were yet to see solutions that “plug the advice gap”.

Many of the current investment focused offerings were not helping the majority of Australians who did not usually get planning advice, as they reached only the 20 per cent of wealthy customers who already engaged with financial advisers, NMG said.

The group was sceptical that digital offerings could reach the remaining 80 per cent and make comprehensive financial advice inexpensive and accessible for the mass market.

Apart from digital investment offerings, the other prolific robo advice tool was retirement calculators, which were pitched at providing super contribution and investment strategy advice in place of traditional calculators, the group said.

However, the calculators were unable to consider the individual circumstances of the user including their health and work situations, making them far less useful than face to face advice.

“While such tools are certainly a leap forward in digitising advice for direct consumption, again for most Australians, the scope of the advice on offer is far too limited,” the blogpost said.

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