Thousands use LV's robo-advice service

Thousands use LV's robo-advice service

Almost 6,000 people have used LV's full automated financial advice service since it was launched in summer 2015, in an early indication that there is a significant market for comprehensive robo advice.

The friendly society also revealed that 24,000 people had used its less comprehensive "automated guidance" service. 

However, LV was "unable" to reveal how many of the 6,000 customers who paid the £199 for a full statement of advice went on to pay £499 to execute the statement of advice.

A spokesperson added that "a number of clients" who initially engaged online had gone on to call LV's telephone advice service.

"[This] suggests that there is demand for online solutions at the beginning of the advice journey even if consumers then prefer a more traditional telephone based advice service," the spokesperson said.

LV's Retirement Wizard is regarded as one of the more comprehensive robo advice services on the market.

Unlike many of the automated guidance services available, it provides FCA-regulated financial advice, and therefore competes more closely with human financial advisers.

In addition to targeting its own customers and the new customers on the retail market, LV also distributes Retirement Wizard through deals with existing providers, including The People's Pension, Berkeley Burke, Key Retirement and Capita.

Philip Brown, head of policy at LV, added that the firm was "continuing to explore more partnerships this year and how we can help traditional advisers, for example through a robo-paraplanner tool".

Mr Brown was eager to stress that he did not view Retirement Wizard as a competitor to face-to-face advice. 

"While many advisers will see robo-advice as a competitor we believe that services like Retirement Wizard help to engage those people who would never have taken advice normally.

"We also believe we can work alongside advice firms to provide efficiencies, help them reduce costs and ultimately service more clients with smaller pots."

LV's launch of Retirement Wizard preceded the Financial Advice Market Review final report last spring, which promoted the automated advice as a way to close the advice gap.

In its ninth recommendation, it stated: "The FCA should build on the success of Project Innovate and establish an Advice Unit to help firms develop their automated advice models."

It elaborated: "FAMR wants to support the development of mass market automated advice models that have the potential to bridge the advice gap, whether they are fully automated, hybrid (i.e. with human interaction in the process) or tools to bring efficiencies to the face-to-face advice process."

So far very few life and pensions companies have followed LV in the creation of a comprehensive robo advice option, with most stating it is not a substitute for face-to-face advice.