Most planners think robo can be their friend


Robo-advice has emerged as a substantial potential game-changer in Australia, according to the latest research released by Investment Trends.
The research reveals that financial advice firms may be well advised to adopt robo-advice as part of their offerings in circumstances where a substantial advice gap has emerged with Australians becoming wealthier but fewer of them seeking advice.
"In Australia, the use of automated investment services or robo-advice is still nascent but may soon change with growing awareness of these solutions," according to the Investment Trends analysis.
It said its research had revealed that 27 per cent of the Australian online investor population had already heard of robo-advice, up from 19 per cent just six months ago and that many were seeking to learn more.
Importantly, the research suggests most planners have adopted a positive view of robo advice and where it fits in the equation.
It said that, as a whole, more financial planners were optimistic about robo-advice compared to those who were worried about its impact on their business.
Investment Trends research director, Recep Peker said: "The vast majority (83 per cent) believe robo-advice is not a threat to the financial planning industry and/or has a place in the planning practice".
"In the financial planning world, robo-advice is much more than just automated portfolio recommendation and rebalancing tools," he said.
"Planners see robo-advice assisting across the entire advice delivery spectrum, from the front to the back office."
When asked how automated advice tools can benefit their business, financial planners most commonly perceived automation as an enabler to help them to focus on providing strategic advice (53 per cent citing this), service more clients (43 per cent), and to lower the cost of advice (41 per cent).
Peker described robo-advice as a potential digital disruptor and suggested it would take centre stage as more solutions became available, and as investors themselves began to engage with these non-traditional advice models.
He pointed to Australian online investors typically seeing themselves as early adopters, with 56 per cent saying they were among the first to try products and services new to market.
"Australians' openness to new solutions is an encouraging sign for providers who are considering the robo space," Peker said.
"The rise of robo-advice comes at a time when the desire for advice is high, and it can make a difference to people who may not necessarily be able to afford advice," Peker said.
In the United States, robo-advice usage was not isolated to younger, wealthier tech savvy investors. Adoption was also high among lower balance pre-retirees.
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