Standard Life and Scottish Widows have announced plans to enter the robo advice market as they target the direct-to-consumer market.
Standard Life confirmed it would be automating parts of its financial planning proposition to offer a direct service to clients, while Scottish Widows has been looking into developing a form of robo-advice.
Steve Murray, chief executive of Standard Life’s restricted national advice business,1825, said the firm wanted to expand by providing a direct-to-consumer service which would be complemented with face-to-face planning by advisers.
He said: “We strongly believe in the value of delivering financial planning services through strong personal relationships. However, we also recognise that digital solutions will have a major role to play in helping people to make informed financial decisions.”
1825 was set up last year when Standard Life bought formerly independent advice business Pearson Jones.
Last month it acquired Norfolk-based Almary Green and Glasgow-based Munro Partnership, taking its number of advisers to more than 50. They will advise more than 7,000 clients on around £2bn of their assets.
David Holton, director of corporate propositions at Scottish Widows, said development of a digital advice proposition was under discussion at the company.
He said: “We are working a lot with our adviser partners on what robo-advice looks like and its role. It would be relatively easy to fit into what we are doing already but it has to be the right thing for the consumer.
Scottish Widows had previously flagged its intention to invest in its offering, saying earlier this month it would spend £50m on a programme to improve its products and services, as well as on improving its adviser support.
This includes the creation of a range of new digital services over the next 18 months.
Last week, the provider launched a new employer hub as the first in this series of digital developments.
The online portal is currently being tested with six pilot employers, and will allow clients to upload payroll files in a variety of formats, providing immediate feedback on any errors with their data, so that any issues can be corrected instantly.
Mr Holton said: “I want to bring in much better analytics to show the adviser or consumer how their scheme is performing relative to their peers in the industry.
“The adviser will be able to spend more time analysing information rather than collecting it.
“There is a greater desire for information than ever before and we are trying to simplify the access to it.”
| FCA gives robo advice boost |
| Firms’ robo-advice plans received a boost last month, under recommendations in the Financial Advice Market Review report published jointly by the FCA and the Treasury. It said the FCA will help firms to set up automated advice models to service consumers who have been abandoned by the existing advice system. |
Adviser view:
Jeremy Edwards, partner at Leciestershire-based Martin Redman Partners, said: “[Providing robo advice] is not the same as being human.
“As a business, we’ve looked seriously at doing some of it ourselves, but there are a number of snags. Most complicated is getting people to be absolutely straightforward with questions they’re being asked. It’s very easy face-to-face to pick up on what someone says and ask what they mean, whereas anything less than a perfect question is going to be a problem.”
