Robo-advice still has a role, albeit limited

Jeanette Marais

Jeanette Marais

It was expected that robo-advisers would completely take over the financial services sector and usurp the role of financial advisers – but, in fact, we found that the opposite happened.

Robo-advice is now used to assist the adviser and streamline the advice process, rather than replace the adviser.

As the market is more resistant to change, our key focus is to improve client experience and enable more time with clients and less time doing administration.

Behind the scenes however there is always scope to create better efficiencies in terms of processing and transactional time, which remains a strategic focus.

In these difficult markets, having a strong trust relationship is key.

Being able to highlight the challenges and deliver to your promises is what builds the strong bond required to create wealth over time.

We need to better reflect our growing client base.

The pace of investing and implementing technology remains a difficult challenge.

Our client and adviser market does not respond to technological change as quickly as it comes about.

It is therefore a fine balance between rolling out incremental innovations and waiting for some big technological disruption that may change the industry.

In these uncertain times, clients need reassurance and find this in face-to-face interactions.

We still see strong growth in the adviser market for this reason.

We have seen that people will use robo-advice to do research, but to make actual investment decisions post conversations with advisers – humans still rule.

Easy steps like balance enquiries can be digital, and use technology like robo-replies to make the process easier, faster and more seamless.

However, when it comes to questions like which type of fund would be most suitable for a person’s unique circumstances, people prefer to deal with people.

Robo-advisers cannot yet assist people to set financial goals, counsel them during market downturns and solve intricate financial and tax planning needs.

This is why it is important that we implement technology to provide faster service and give straight answers, but leave actual advice to the financial experts who also build relationships with their clients.

We expect that robo-advisers will grow in popularity, but that growth will be based on the relationships and trust between human financial advisers and their clients.

A client first has to trust the brand, before it will trust the robo-advice and assistance that the brand gives them.

So essentially, it always comes back to the human touch.

We still see a key role for advisers going forward for these reasons.

It remains tough going as many have business models that collect revenue based on assets under advisement.

The sluggish economy has fewer clients with disposable income to invest and poor investment performance has seen asset balances decline.