The robots are coming; am I going to lose my job? said the IFA.
Robert the Robot, he's on his way and he's going to replace the advice you give - I've lost count the amount of times I've heard this one.
The good news is that if you think this is the case, then you're missing the point. Actually, I believe robo advice will help advisers become more efficient, reduce costs, increase client numbers and ultimately make savvy practices more profitable. The US has already proved my point.
So, how will robo advice help you and your business? Let me share with you our proposition and where robo advice will work for our business.
Working with Intelliflo (Intelligent Office) our back office system, we will be enabling clients to invest in a stocks & shares Isa or general investment account online direct, using an automated risk profiling and goal-based system.
I think robo advice should be seen as an asset rather than a threat.We will charge an initial fee but no ongoing, and we believe this is where the future of low-cost advice will be.
For every new client we attract to invest on the platform we increase our future potential client bank. We will know the client basic details including contact details, investment values and risk profile. Furthermore, they will have the option to opt into our marketing.
Once a client's portfolio reaches a certain level (where it could be justified to warrant ongoing advice or where a trend can be spotted) an adviser could be well placed to make contact.
We can look to engage with the client on a face-to-face basis, potentially adding an ongoing advice charge.
But where will we find new clients? Will it not undermine our normal proposition?
As a business we engage with many businesses, we set up many new group schemes whether that's pensions or protection, in addition we also run employee financial education seminars and have a strong following on social media.
We will look to leverage all of the above to create new clients, from an area where we currently rarely generate any.
I think robo advice should be seen as an asset rather than a threat.
Robert Lewis is director of operations at Heritage Financial Solutions.
