There is scant evidence of much of the game-changing technology available being employed in most advisory business across the country.
Yes Brewin Dolphin is the latest firm to offer a fully automated investment service, national advice firm LEBC has notched up £500 million of assets invested in its ‘bionic’ robo-advice service (with 25,000 clients using the service) and Killik are about to enter robo-advice market for lower-income investors, where monthly investment will start from £25 a month. But these are exceptions.
Our latest adviser study shows that while advisers accept that clients of all kinds would welcome additional technology / solutions right through the advice process it is clear that when advisers think about what is required, their (often sole) focus is their own rather than their clients’ needs. In other words – technology that helps advisers do what they already do more efficiently and cost effectively.
There is far less evidence of a more client centric start point to the question of technology integration. What is becoming possible is staggering, from systems that map clients’ emotions through movements (and attitude to risk) in facial muscles, and technology that mines social media to predict life events. But they are nowhere near most advisers’ ‘to-do’ (or even their ‘to-consider’) lists.
And the reluctance is understandable. Investment (both in terms of money and time / learning) in truly innovative technology is significant, as is the risk where the return is yet to be defined given the relative immaturity. These risks will seem more unpalatable for those planning to sell their business in the next few years.
The industry, though, has no (real long term) choice but to embrace technology or face obsoletion.
This risk is because the younger, generation is demanding it – more than one-third of Gen Y and Gen X respondents to a recent study cited better technology as an unmet financial need. Among Baby Boomers, only 9% said the same. Millennials are living their lives online and that’s where they will go for advice (as they define it, not how we or the regulator defines it).
Yes, good financial advice (real life planning) depends on things that technology can overlook, like intellectual capital and an understanding of nuance.
But the choices are not binary: discussion to date have centred too much on the polar views that investors either want to do it all themselves or have it done for them.
For most, the truth is closer to somewhere in between.
Q: % consumer agreeing with the following statements:
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