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Distribution Technology enters robo-advice market

Distribution Technology enters robo-advice market

Distribution Technology is entering the robo-advice market with the launch of an automated advice app for advisers to use with clients.

Included in the tool, branded AccessAdvice, is a dynamic planner asset and risk model to help ensure ongoing investment suitability.

The prototype is being tested with advice firms but Ben Goss, chief executive of Distribution Technology, said initial results have shown they benefit from a reduction in time and cost.

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Simple Isa advice will be offered by the service at first, with plans to expand the tool to cover more complex needs in the future.

Mr Goss said he decided to bring forward the launch of the app after in-depth adviser research and participation in the Financial Conduct Authority’s Project Innovate seminars.

Mr Goss said: “This opens a significant new market, estimated by the ONS and FCA to be 15 million people with investments of less than £100,000 but more than £1,000.”

Robo-advice has exploded within UK financial services in the last couple of years, with advisers creating their own low-cost services alongside heavy investment by banks in fintech.

Advice firm True Potential last year launched a direct to consumer low value investment service for small savers to make ad hoc investments.

The Financial Conduct Authority last year pledged to encourage innovative use of technology in finance, running a three-day symposium to discuss ideas for best pratice, though critics have said it is not doing enough to lower what they feel are the compliance burdens acting as a barrier to more development in the area.

Robo-advice also looks set to be a key feature of the Financial Advice Market Review, which was launched to look at wasy to allows less wealthy people to have access to advice.

Adviser View

Alistair Cunningham, a financial planning director thinks that robo-advice is not advice, but a process.

He said: “While it may help commoditise simplified product purchases, and help with the investment risk profiling it is not really any part of complex and comprehensive financial planning.

“Like any process it will only be as good as the provider and naturally will be subject to the same biases and shortfalls.”