Embark is preparing to move into the robo-advice space as it looks to bolster its direct to consumer services alongside its technology offering for advisers.
The business said it wants to use the experience at its disposal within new owner Lloyds Banking Group to appeal to self-directed investors and move into the direct to consumer space.
It plans to do this by creating what it described as a simple ready-made investment proposition, with a full suite of self-directed investments but will also launch a robo-advice service to run alongside this.
Speaking toFTAdviserabout the plans, chief executive of Embark, Jackie Leiper, said moving into robo-advice was a “tricky area” which not many businesses have cracked successfully so far.
Though many firms have set up robo or digital advice services in the past few years, many later decided to shut their doors after failing to make it profitable, a challenge Embark faces also.
“At the moment we're having a good look at what is out there,” Leiper said. “I think some of the capability that we will build will start in quite a simple fashion.”
Embark said the service will complement the advice services it already has in place with Schroders Personal Wealth and Cazenove Capital which will continue to offer face to face advice for affluent and high net worth customers.
The robo's launch is earmarked for sometime in the second half of 2023.
Leiper said it will be aimed at individuals that are confident in managing their own investments but should co-exist with Embarks's intermediary offering.
“We're moving into a phase where it's not an either or,” she said. “It's not that I either have an intermediary or I do it myself.
“I think we've seen a lot of consumers that do both so I don't see it replacing what the intermediary market does today. I see it actually capturing those customers that are really starting on their financial planning journey and confident in managing that themselves.”
At the moment the business is looking into whether its robo-advice service will be purely digital or whether there needs to be some element of human interaction to make it work.
Risk assessments and investment modelling can be completed by the robo side but Embark said it needed to ascertain whether individuals still wanted human contact and if so what purpose this would serve.
“We definitely recognise there's a wee bit more investigation to do here and in terms of how we develop this proposition,” Leiper said.
Embark also hopes that some of the technology it will use for its robo-advice service will be made available to its adviser clients as well. Especially white label customers who want to use the technology within their own firms.
The robo market
A number of firms have set up robo-advice services in the retirement space in recent years, signalling an increasingly busy market to break into.