2017 is set to be the year of robo-advice, according to a report by consultancy firm EY.
It has predicted that by the end of 2016 there will be between 50 and 70 players offering, or planning to offer, an automated advice solution.
According to James Tufts, UK head of life and pensions at EY, one of the reasons for the growth of robo-advice next year will be providers updating their systems.
He said: “One factor that may help is the European General Data Protection Regulations, which will take effect in 2018 and will introduce a right to data portability, opening the way for customers to share and consolidate data that has historically been scattered across their financial services providers.
“Before this can happen however, providers need to find a way of assessing and managing advice risk in the current regulatory environment.
“For providers with a legacy IT estate, we see increased usage of software robotics and process automation coming in to deliver these projects, as the ‘rise of the robots’ continues unabated.
“Overall 2017 is set to be the year when so-called robo-advice will make a real break-through in the UK, and we expect several large providers to launch propositions in this space, which will create yet further momentum.”
EY has predicted the robo-advice industry will grow to $2.2trn (£1.7trn) by 2020 as consumers become increasingly comfortable with digital channels and are attracted by access to more affordable wealth management.
It has calculated automated advice fees to typically be around 0.25 per cent to 0.5 per cent of assets compared to 1 per cent to 2 per cent for a human adviser.
damian.fantato@ft.com
