UK financial advisers are divided on robo-advice, with over three quarters saying it is not a business threat, while a third – mainly smaller firms – believe it is a top challenge.
Aegon’s ‘Technology in the Financial Advice Market’ correlated the level of threat felt with the size of a firm’s portfolios and where customer financial affairs are less complex and could be served by standardised approaches.
Advisers managing less than £5 million (€5.63 million) in client assets were three times more likely to feel threatened by robo-advisory technology than those who manage over £100 million.
Nearly half of the 252 advisers surveyed overall expected more demand for robo-advice over the next 12 months.
Automated advice is in its infancy but already it is estimated that the technology has provided advice on more than £1 billion of assets in the UK, according to an Investment Association report.
Benefits of robo-advice could include lower costs and higher speed, particularly for customers who need simpler advice but are not prepared to pay for it or can’t afford to, Aegon said.
Steven Cameron, pensions director at Aegon, said “ poor customer take-up” of pure robo-advice highlighted the ongoing importance of the human aspect in financial advice.
“For this reason we see robo-advice technology as being most likely to represent an opportunity for advisers to complement their offerings, and not a threat.”
©2017 funds europe
