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Guide to Robo-advice

    CPD
    Approx.60min
    Guide to Robo-advice

    Introduction

    Nonetheless, just like web-based retailers, they will change the world.

    The advice process with robo-advice is familiar.

    First, an adviser obtains information and financial data about a person.

    Then they use that as a basis for recommending, and implementing, an appropriate investment strategy.

    A robo-adviser does exactly the same thing – but without any human involvement.

    The robo collects data and information; in most cases, the prospective investor enters it into the system themselves.

    At the robo’s heart is an algorithm that scores the information and decides what investments should be chosen.

    The robo then presents the investment strategy, which is usually passively focused around index funds or ETFs, and allows easy implementation.

    This guide will explain what robo-advice is, potential rewards and pitfalls of a robo recommendation, how it could threaten or compliment traditional financial advice models and how fintech in this area will transform the market in the next few years.

    Supporting material produced by: Paul Resnik, director of investment suitability experts FinaMetrica; Nick Eatock, founder of Intelliflo; Ben Goss, co-founder and chief executive of Distribution Technology; and Frazer Wilson, senior consultant at Thomas Miller Investment.

    In this guide

    CPD
    Approx.60min

    Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

    1. What does Mr Wilson say is the big difference between traditional financial advice companies and robo-advisers?

    2. What comparison does Mr Resnik give for how robo-advice will change the advice industry?

    3. Who is robo-advice suitable for, according to Mr Eatock?

    4. What part of the market has fully automated advice enjoyed considerable success in, according to Mr Goss?

    5. Which company is NOT listed as a robo-advice player established in the US?

    6. What does Fos wants robos to give, according to Mr Resnik?

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