Two out of five UK wealth managers view robo-advice as a threat to their business, a survey conducted by Vanguard suggests.
The research, which surveyed 70 wealth managers, found although 40 per cent of respondents admitted they were concerned about the impact of robo-advice, an equal number said it offered the potential for more efficiency.
They saw robo-advice as an opportunity to attract new clients to their business in the next five years.
Just 7 per cent said it would have no impact on their business.
It is not the first time that advisers have expressed apprehension over robo-advice. At a recent event in London, FT Adviser reported on how Samantha Seaton, chief executive of technology provider eValue, said: “You will always have a tension whereby traditional advisers are going to feel alienated and threatened by robo-advice and that is perfectly natural.”
Additionally, commentators and members of the FinTech community feel that although robo-advice is growing, it’s impact will not be threatening until it develops its human element.
At a recent robo-advice conference in London it was predicted by consulting firm AT Kearney that about US$2trn (£12trn) will be managed under ‘robo-advisers’ in the US by 2020.
Janine Menasakanian, head of wealth for Vanguard’s UK business, said: “The advent of the robo-advice age is creating significant hype and so it’s not surprising that wealth managers are considering the impact over the long-term.
“What we do know is that technology is here to stay, so wealth managers will need to consider how to embrace the advantages of technology whilst still emphasising the personal, trust and relationship-based parts of their value proposition.”
Andrew Arwas, UK head of wealth management and banking services at Capco, said: “Propositions based on robo-adviser technologies offer a number of key benefits.
“They are highly accessible – especially in terms of being available through web and mobile sites, meaning anywhere, anytime accessibility … certainly not only by appointment.
“Secondly, those propositions which are well designed will be accessible in the sense that they can make the experience of engaging with one’s finances simpler and less daunting.
“This will be critical as the large majority of investors – not just the savvy, confident ones – seek to make investments through digital channels and propositions.
“Thirdly, we should also see robo-adviser technologies bringing down the cost of delivery of advice, and in so doing, bring back the potential to provide advice to the retail and mass affluent customers who fell into the post RDR ‘advice gap’.”
A total of 15 per cent of wealth managers surveyed by Vanguard said they were yet to form an opinion on robo-advice.
