Investors believe financial services providers have become too reliant on technology as a result of Covid, suggesting that human interaction will always win when it comes to service.
Research by Market Financial Solutions found 65 per cent of the 975 individuals surveyed believed banks had become over-reliant on technology to handle their customer services during Covid.
This suggests that, when given the choice, investors would rather deal with a human than a robot, which commentators said was especially true of the advice sector.
Elliot Gutherie, associate financial planner at Create and Prosper FS, said robo-advice and the incorporation of technology just doesn’t give the same results as meeting a client face-to-face.
He said: “You definitely do not get the same non verbal feedback from clients over Zoom, and there’s some conversations that are definitely better face-to-face, such as bereavement or personal issues, I feel zoom can make it feel a bit impersonal and cold.”
Olivia Kennedy, financial planner at Quilter, believes when it comes to dealing with money, investors are hesitant to rely purely on technology.
Kennedy added: “Our sector is adapting and changing. Face-to-face advice does not have to mean sitting in the same room as someone. It can mean speaking to someone over the phone, on an app or over video chat.
“The changes to our sector brought about by Covid-19 are encouraging and technology has a place in the future, but the fundamentals will stay the same.”
The robo-advice market has struggled to get its feet off the ground after several firms found it difficult to attract clients.
Only last month (January 28), robo-adviser Scalable Capital, which is backed by BlackRock and has assets exceeding €3bn (£2.6bn) announced it would be closing its doors to the direct-to-consumer UK wealth market.
However, Scalable Capital told FTAdviser it was still "deeply committed" to the UK market, largely through its B2B partnership on digital investing with banking giant Barclays, which launched its digital advice service Plan & Invest last year.
But after a flurry of launches in recent years, many firms have suffered a similar fate to Scalable Capital.
In May 2019 it emerged Investec was closing its Click and Invest robo-advice business following two years of losses, while Moola shut its doors in January last year.
Many ultimately failed to attract clients, who commentators have said, still prefer face-to-face advice.
Meanwhile, a third of investors told Market Financial Solutions that the qualities they looked for in financial services providers had changed as a result of Covid-19, with a quarter switching providers over the past year due to the poor service received.
Ruth Handcock, chief executive officer of Octopus Investments, added: “We often call customer service when something has gone wrong or when we have a concern. In those situations it’s about listening and providing reassurance to customers, to show that someone cares, and technology is a long way off being able to do that."
Paresh Raja, CEO of Market Financial Solutions, said: “While the end of Covid-19 could be in sight, the reality is that things will not return to the way they were pre-pandemic. Investors want to work with financial organisations that can deliver a personalised and tailored service, not to mention support and guidance during these uncertain times.
“That’s why all the organisations that make up the financial services sector need to ensure they are recognising and responding to the changing demands of their clients. If not, they run the real risk of losing customers to rival firms.”
amy.austin@ft.com
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