Evalue to launch robo service in the summer

Evalue to launch robo service in the summer

Evalue's chief executive has said the company will launch an automated advice service this summer.

The company has been trialing its automated service in the Financial Conduct Authority's sandbox since 2017.

Paul McNamara said the service would cost a flat fee of £200 and would be launched by working with benefits consultants so it could be offered in the workplace for people wanting advice on their pensions.

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He said: "The feedback we have had so far is that it has been incredibly valuable. The FCA told us to keep going because the market needs a breakthrough. The breakthrough they want to see is more informed and better served consumers who are more in control of their savings."

Mr McNamara said Evalue was looking to create technology which could help those who cannot afford advice, but who need it because of the decisions they have to make due to the pension freedom reforms.

He said: "We have got a lot of people now who desperately want financial advice but cannot afford it or are presented with choices they never thought they would have to make. Pension freedoms is a big driver of confusion at the moment.

"Technology can offer options to these people."

Mr McNamara said pension freedoms provided an opportunity for Evalue to grow its business because of the demand for services which help address the demand for advice from employers, life companies and employee benefits consultants.

He said: "The life companies are trying to act principally through advisers but increasingly trying to do things direct. One of our very large clients, which is a high street presence, want to do some very simple stuff on an iPad."

But while Evalue is looking to break into robo-advice, others have already decided to exit over profitability concerns.

Last month Investec closed its Click and Invest robo-advice business, following two years of losses.

The company stated Click and Invest lost £12.8m in the year to the end of March 2019, having lost £13.5m in the year to the end of March 2018.

The company took a write-down of £6m on the capitalised value of the software operated by the robo-adviser, taking total losses to about £32m in two years.

Simon Bussy, a consultant at Altus, has long been skeptical of the viability of robo-advice businesses.

Last December he told FTAdviser many robo-advisers were spending too much money on acquiring new customers to have a viable business model, and the advertising strategies used were ineffective.