Advisers have been warned they face a “cliff edge” unless they engage with robo-advice.
A panel of experts at the Chartered Institute for Securities and Investment’s financial planning conference in Newport today (26 September) said robo-advice did not necessarily pose a risk to financial advice as long as advisers adapted.
George Rooke, head of UK portfolio management at Wealthsimple, said there were advisers who would “struggle” because of their refusal to engage with robo-advice.
He said: “If they (human advisers) are not doing what they should do then the clients will walk away and our service is probably easier for them to come to.”
Clinton Askew, director of Citywide Financial Partners, said his firm has put together an app to help engage the children of his current clients.
He said: “The take-up overall has been about 30 per cent. It is part of our stepping into this space.
“You either engage or you don’t but if you don’t you might end up at a cliff edge where your clients have gone and the money has gone with them.”
Ian McKenna, director of the Finance & Technology Research Centre, said that even if advisers did not intend to remain in the industry to see these changes out, they should still consider introducing some of them.
He said: “You need those young clients to come on to be the future of your business unless you are intending to close the business down and not sell it.
“If you are intending to sell it, it will make a very big difference to the valuation you can achieve for the business.”
But Michelle Pearce, co-founder of robo-adviser Wealthify, said advisers did not necessarily have to worry about being replaced by companies such as hers.
She said: “What we are really targeting is a new type of client, not necessarily the guys who are already getting financial advice.
"It is the people who might have £5,000 to invest. We are working with financial advisers who are referring business to us because they don’t want to service those clients."
She said advisers did not necessarily have to copy robo-advisers’ technology and instead they could focus on other areas where they are changing the financial services sector.
Ms Pearce said: “Take the learning you like from the robo players. It doesn’t have to be all the technology.
“It could be about making things simpler, removing jargon or speaking to clients through the channels they want.”
damian.fantato@ft.com
