One of the biggest barriers to a fully online advice process is because the providers cannot provide complete automation.
David Stevens, LV=’s new head of automated advice strategy, said the mutual had to charge more to execute its clients’ wishes because this could not be automated, and required a human being to input information.
LV= charges customers £199 for an online retirement income recommendation but £499 for executing those recommendations.
Mr Stevens said: “The reason setting up the policy is higher is because there is a very low level of automation involved in it and it’s an area which is ripe for automation.
“I can certainly see a set-up where the cost of advice is significantly lower.”
In August this year, Mr Stevens was hired by the life and pension provider to lead the rollout and development of LV=’s regulated online advice service for the retirement income market, Clear Online Retirement Advice, among advisers and corporate partners.
Chris Williams, founder of Bristol-based Wealth Horizon, launched the firm’s automated advice service in August 2014. Mr Williams claimed that this service, powered by Parmenion, was the first in the UK to provide personal regulated online investment advice, calling it “robo-advice with a human touch”.