Your IndustryAug 7 2015

Technology firm says robos are not the future

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Technology firm says robos are not the future

‘Robo-advice’ will not be a success in the short to medium term, according to Distribution Technology’s chief executive, who has positioned his firm to digitally service human advisers.

Speaking to FTAdviser, Ben Goss commented that advisers will continue to serve the majority as we move into the next digital age, something which not only goes for the UK, but places like the US and Australia, where automated alternatives are further advanced.

Earlier this month, a significant step was made on these shores, with LV buying a majority stake in automated advice firm Wealth Wizards to help make its retirement advice service as online as possible, with telephone-based assistants only brought in for the most complex cases.

Mr Goss pointed out that the risk profiling process component of LV’s robo solution is already powered by Dynamic Planner, while Distribution Technology has many similar relationships with providers, like powering Friends Life’s guidance tools and backing Just Retirement’s move into simplified advice.

“We have an omni-channel strategy, which means we’re behind most of the market for things like risk profiling and investment suitability.”

The firm now has 25 provider and platform partners and recently signed up its 90th fund management client, meaning almost 1000 funds and managed portfolios are part of the system.

Mr Goss explained that in the last few months the demand for online tools and apps has increased, something which their technical team is responding to with new developments.

“But this doesn't replace or compete with advisers, rather augments what they do.”

He did however concede that in 20-30 years time those like his son - born in the year 2000 - who have grown up with the digital first mindset, may have a different attitude to accessing advice.

Last month, FinaMetrica co-founder Paul Resnik spelled out a somewhat different future, listing the various countries where his firm was in negotiations with firms on various forms of artificial intelligence or algorithm-based advice models.

“Every bank, life company, investment research house, pension fund, investment manager, advisory firm and platform on the planet will be developing its robo and cyborg goals in the next 24 months,” Mr Resnik said, adding that some will see it as an offensive strategy, seeking new clients, while others will see it as defensive, protecting existing relationships.

peter.walker@ft.com