Back office systems have long been the stalwart software for financial advisers. They have become the place where advisers spend most of their time: reconciling payments; portfolio reviews; and assessing clients' financial position.
Now back office systems are getting in on the robo-advice sector act.
Intelliflo launched its robo-advice service at the end of last year, and it now has 17 firms using it, with 100 firms in the pipeline.
Nick Eatock, executive chairman of Intelliflo, whose back office system is used by nearly a third of advisers, said: "You see a D2C on a non-advised basis which a client can go and use at their own risk.
"We provide automated advice and it's rolled out entirely through our advisers."
Although the recommendations are provided by algorithms, the parameters of the system are set by the adviser, so he or she has more input than clients would get from a conventional robo-adviser.
He said: "Advisers can get their own branded solution, they can roll out to their clients in a self-service environment and in less than 15 minutes, get their attitude to risk, capacity for loss and investment solution without an adviser having to physically do anything.
"It's integrated fully within their own advice business, with their income reconciliation and valuations." The adviser would charge 0.35 per cent on the service, he said, which means that if the client is investing £10,000, the adviser is only receiving £35.
Mr Eatock added: "The reason why advisers do this is they want to provide access to customers who can't afford full fat advice today, but maybe when they're older they're in a position to afford financial advice."
Many robo-advice services have launched over the past year, by a range of providers; from fund managers, financial advisers and wealth manager firms. The plan for many is take advantage of recent developments in technology, and the fact that many advisers firms, who would have in the past been able to cross-subsidise their less affluent clients with their more wealthy clients, are no longer able to do so.
Scalable Capital announced last week it had doubled its assets under management to £172m in the last three months.
The difference with robo-advice firms from administration businesses is that the adviser has much more control over the results determined by the service, and that it is fully integrated with the adviser's existing systems, according to the proponents.
Parmenion, the platform, has also got onto the scene, by offering a robo-advice service for a number of other people, helping 900 firms with 70 digital propositions. Marianne Streames, product manager at Parmenion, said: "At the core of our adviser offering is the financial plan and the relationship with their client, that’s the product they are selling and robo-advice service simply provides another way to service it."
Iress has also been developing a robo-advice proposition.
Keith Churchouse, a financial adviser, has built his own robo-adviser, called SaidSo, as an extension of his Surrey-based advice business, Chapters Financial. He said the most important aspect was the fact that ultimately the adviser is responsible for the recommendations, even if the system produced them automatically.
He said: "Whereas in the past, the clients could get just a valuation on their funds, they can now get performance or CGT; then from an advice point of view where you're making a recommendation to a client there are comparators which allow you to do these comparisons quickly.
"Most IFAs will have some form of comparators as part of their standard business, but some back office systems are extending out their resources to make remote advice easier. That's got to be sensible, but the responsibility for the advice still lies with the adviser.
"These systems will incorporate that research into a recommendation letter automatically, but you have to be sure the advice still lies with the adviser."
Melanie Tringham is features editor of Financial Adviser
