Advisers who adapt to the rise of the robo-adviser and integrate it into their advice processes will help attract long-term customers, a pensions specialist has claimed.
David Thompson, managing director of marketing and proposition for Axa Wealth, said he was aware the rise of robo-advice had been “dubbed by some as the beginning of the end for traditional face-to-face advice”.
This was particularly becoming an issue as large UK banks have started to show some interest in delivering an automated advice model, perhaps indicating a return to the advice market many left in the lead-up to the implementation of the Retail Distribution Review.
However, he said advisers should not consider robo-advice as a threat, but an opportunity.
“A closer look at how robo-advice is currently taking off in the UK reveals an opportunity for advisers who are also willing to consider incorporating automated services into their business model”, Mr Thompson said.
Some advisers, responding initially to the findings of the Financial Advice Market Review in March this year, said they had not considered using automated services.
Yvonne Goodwin, at Leeds-based Yvonne Goodwin Wealth Management, told FTAdviser at the time her firm had “no plans” to install an automated model, arguing there is still demand for traditional face-to-face advice.
However, Mr Thompson added: “By having their own automated model in place, advisers can target the same pool of potential customers [as are the banks], who are looking to take their first move into financial advice and use its existing offering to serve as an ideal stepping stone if and when the customer requires a fuller advice service.”
So rather than advisers having to create a standalone product, using some form or robo-advice could “actually compliment a full advice model and help attract customers for the long-term”, Mr Thompson concluded.
His comments came as Royal Bank of Scotland and Natwest announced that, from June, they will be replacing advisers with an automated service. The banking group will no longer be offering face-to-face investment advice for customers with assets of less than £250,000.
As reported by FTAdviser, RBS will also be scrapping face-to-face protection advice completely, offering it only over the telephone.
Find out more and earn 30m structured CPD by reading David Thompson’s article: Robo-Advice: the good, the bad and the ugly.