IFAs stress that robo-advice is not the answer

Added 1st August 2016

Over 80% of UK-based financial advisers are unconvinced of the merits of robo-advice services to tackle the United Kingdom’s advice gap, according to research by Prudential.

IFAs stress that robo-advice is not the answer

The Prudential study found that fewer than one in five (17%) advisers believe that technology-driven robo-advice will help close the advice gap for mass-market customers.

Almost half (47%) of the financial advisers polled said robo-advice will not help to close the gap.

This is despite the recommendations in the Financial Advice Market Review (FAMR) that the Financial Conduct Authority (FCA) should set up teams to offer support to firms that are using automated advice and guidance models, Prudential noted.

The research was carried out in March 2016 with responses gathered from 206 financial advisers across the UK.

Head of Prudential’s business consultancy for advisers Paul Harrison said: “Improved technology can bring greater efficiency, reduce costs and should help advisers to serve their clients better while continuing to run viable businesses.

"Advisers are more aware than anyone though, that receiving tailored advice to meet individual needs is the preferred solution for many clients. It is no surprise then, that our research reveals advisers are not convinced that improved technology will be a cure-all for the advice gap.”

“However, at Prudential we recognise that robo-advice could have a significant role to play in the future, in bringing a more limited form of advice or guidance to those people who either feel they don’t need an individual service from a professional adviser or can’t afford it,” he added.

Prudential said it is holding a series of seminars for advisers to help advisers with their processes and client service. 

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Mis-selling Scandal in the Making?

Robo advice may well help plug the "advice gap" for a short while, until, that is, it becomes obvious that the "advice" was ill considered, inaccurate and out of line with the best outcome for the client. Then we have the next mis-selling scandal... Who you ganna call?...RoboBusters!

Posted by: Sandy, 01 Aug 2016

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Alex Sebastian

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Alex joined Portfolio Adviser in April 2014 and has been a financial journalist since 2008. He has previously held editorial positions at the Financial Times Group and Euromoney Institutional Investor. Alex is NCTJ qualified and has a degree in economics from the University of Sussex.


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