Bellpenny to offer robo-advice

Bellpenny to offer robo-advice

The newly merged Bellpenny and Ascot Lloyd are talking to two providers about starting a robo-advice service, the chief executive has revealed.

Nigel Stockton, chief executive of the merged group, said that the new service “should not be expected in the next two to three months, but by the end of next year we should have something.”

“The concept of robo-advice is not a simple one,” he said. “The economics are not simple, and we need to work out how to integrate it with our existing telephony service.

“For example, what do we do if someone gets into trouble and needs help - do we let them flounder, or do we expect them to use a service that comes with more of a cost?

"These are not simple questions and there are no simple solutions.”

Bellpenny and Ascot Lloyd announced last week that they had merged to create a £6bn funds under management financial planning company.

The merger creates one of the largest independently-owned wealth management businesses in the UK.

Bellpenny had previously announced that it would launch a robo-advice service in the second quarter of last year.

Former acquisitions director Dominic Rose said the service would offer ‘guided advice online with telephony support”.

Mr Stockton said: “Will we provide a service to everyone? Yes we will because we have to. Are we going to be the first choice for those with less than £50,000 to invest? No, I doubt it. But robo-advice and telephony is how to reach those clients in the most cost-effective way.”

A recent survey from HSBC suggested that, despite the growth of robo-advice providers, many customers don’t trust them.

Just 21 per cent of people would trust a robot to give them mortgage advice and only 44 per cent said artificial intelligence-powered investment advice was important to them.

Steve Carlson, financial adviser at Carlson Wealth Management, Cardiff, said: “Robo-advice has its place and is rapidly replacing a lot of the transactional work financial advisers do, such as picking underlying investments, but it will never replace high quality, face-to-face financial planning and tax advice, which is far too complex and requires the human touch.

“I went out to see a new client last week who wanted to know how to invest a lump sum of money. That us something robo-advice could have done for him.

"By taking a step back and looking at his whole financial picture though, I've already highlighted how to save over £9,000 a year in tax and I've only just started going through the information. Robo-advice couldn't do that.”

Patrick Connolly, head of communications at financial advice firm Chase de Vere, said: "Robo-advice can have an important role to play in helping to fill the advice gap and ensuring that those with fairly basic financial planning needs don’t go too far wrong.

"However, technology alone cannot replace interaction with a skilled independent financial adviser, who is able to extract personal information and preferences from their clients and ensure tailored recommendations and ongoing service is given.