Robo-adviceJun 6 2018

Artificial intelligence in pension transfers 'can cut risk'

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
Artificial intelligence in pension transfers 'can cut risk'

Using artificial intelligence for defined benefit transfers could make the process safer, according to the chief executive of robo-adviser Wealth Wizards.

Andrew Firth was speaking after his company entered into a partnership with Mercer UK to provide an automated DB transfer robo-paraplanner.

He said the use of Wealth Wizard's tool, which uses artificial intelligence to learn which factors an adviser emphasises when deciding whether to recommend a transfer and replicates this, would help make advice more consistent.

He said: "This is a tool to be used by an adviser. You have still got an adviser giving their oversight but the paraplanner is driving consistency.

"It may feel counter intuitive but it is about safety, and you are actually reducing risk."

Mr Firth said Wealth Wizards had taken on board the guidance which the Financial Conduct Authority had been issuing about DB transfers.

He added that the tool could also be used for compliance, because it would flag up when advisers were giving recommendations which were aberrant from a firm's normal house view.

Mercer said defined benefit pensions make up a significant part of its business and it has been working with Wealth Wizards over the past 12 months to build and test this service.

Grant Hughes, head of financial planning at Mercer, said: "One of the reasons we looked at the area of defined benefit transfers first and foremost is because it was clients were struggling to find advisers to give advice on this.

"It was this that led us to think about how we would do it more efficiently."

Mercer Jelf Financial Planning, which is a chartered financial planning firm, was launched in 2016 after Mercer's parent company bought Jelf Group in a £260m deal.

At the time the company said the merger of Jelf Financial Planning with Mercer would increase the latter’s ability to provide financial advice to companies and their employees.

damian.fantato@ft.com