LV is looking to roll out its automated retirement advice service out to adviser networks in the coming months and eventually will looking at expanding the algorithm-based platform into other areas like protection insurance.
Yesterday, the provider announced it had taken a majority stake in Wealth Wizards, following over a year’s worth of work between the two, developing LV’s in-house telephone retirement service Cora to feature an online ‘robo-advice’ element.
Richard Rowney, managing director at LV, told FTAdviser: “Feedback from corporate partners has been positive so far, so we will continue to invest in this area and develop it for partners and adviser networks.”
He added there is no reason why the retirement service could not be modified for use in protection advice.
John Perks, LV’s managing director for retirement solutions, explained that the existing service sees consumers work through an online questionnaire process that takes into account risk tolerance and investor sophistication elements.
If the individual’s requests are too complex, they will be diverted to LV’s telephone advisers but with the same low online charging.
“We’ve found that 100 per cent online advice is impossible, with human touch points needed by some customers at some stages, but obviously we’re working to make the automated system as effective as possible.”
Mr Perks added that last year’s Budget at-retirement reforms pushed this strategic move into automated advice, in an attempt to close the now widening advice gap, also being tackled this week by a government review.
Andrew Firth, chief executive of Wealth Wizards, told FTAdviser that the increased complexity from the pension freedom options meant that many retirees would be looking for assistance, but not all of them want to pay for a full face-to-face service.
He was quick to point out that their service was not ‘simplified’ advice, rather full, regulated advice via the automated system, which only ‘kicked-out’ to telephone advisers when enquiries went outside certain parameters.
“Effectively we produce suitability letters, or advice reports, automatically, then they’re tested like any other adviser would be, so the FCA have no concerns. Obviously there are limitations, but the consistency is a real bonus; that is where national advice firms have always struggled.”
Both partners in the deal said that this was the first of its kind in the UK, with Mr Firth commenting that the UK’s automated market is at a “very immature” stage.
“I suppose you’ve got Nutmeg doing some form of automated investment advice, while the likes of eValue and Distribution Technology appear to be working on similar things, and Just Retirement pre-announced something, but there’s little detail around when and what.”
peter.walker@ft.com
