Planners on board with robo benefits

Majority of advisers believe there is a place for robo


By Sarah Kendell

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Most financial planners have embraced the efficiency benefits of robo advice to lower the cost of advice and help service lower balance clients, rather than seeing it as a threat to their business, according to Investment Trends.

The research firm’s inaugural Robo Advice Report surveyed 9000 investors and advisers across five countries on their attitudes to robo advice, and found that 83 per cent of planners believed it had a place in advice practices.

Over 50 per cent of planners also believed that automated advice tools would help them to focus on providing higher level strategic advice, while 43 per cent said it would help them to service more clients.

Commenting on the results, Investment Trends research director Recep Peker said advisers were showing an increasing desire to service middle income earners in order to keep growing their business, and recognised that robo advice could help them do this efficiently.

“Since 2009 financial planners have been focused on higher balance clients, but the average balance of an advice client has now stopped growing, so if advisers want to keep growing their profits, they have to get efficient at servicing middle wealth clients – which is why they have a positive view of robo advice,” Peker said.

“Robo advice is something that sits in various parts of the planning process –they feel it has a role to play in areas like on-boarding and ongoing engagement of clients.”

Among Australian consumers, the report revealed that more than one in four – over 25 per cent –was aware of the concept of robo advice solutions, compared to 19 per cent of consumers in 2015.

Peker said the local robo market’s continued growth meant there was an opportunity to service the large proportion of the population who needed financial advice, particularly through a scaled service model.

“Half of all people have unmet advice needs in the Australian population, and for many of them these needs relate to investment advice specifically,” he said.

“They are predominantly after a piece-by-piece model of getting this advice, rather than a more expensive, holistic face-to-face service, so robo can play a role in getting that sort of advice to the broader market.”

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