Advisers with robo capabilities will have an edge


While standalone robo-advice won’t attract affluent investors, it will offer a competitive advantage to traditional wealth managers over competitors, GlobalData says.
The research company said that robo-advisers alone didn’t attract assets under management, and that high net worth (HNW) investors generally only entrusted small portfolios to digital-only platforms.
GlobalData’s Technology in Wealth Management: Drivers for Adoption and Future Trends survey found that demand for robo-advice was growing, however, meaning that offering it could strengthen human advisers’ value to clients.
Forty per cent of private wealth managers surveyed noted strong demand for the technology from clients, most obviously in the Asia-Pacific region.
“Despite some drawbacks robo-advice is a competitive advantage that all traditional wealth managers must acquire,” GlobalData financial services analyst, Andrew Haslip, said.
“They are not about to lose their best HNW clients to a start-up robo-advisor, no matter how slick the digital interface. But they might just lose out to a competitor that has adopted the technology and integrated it into its overall private wealth management proposition.
“Although ultimately the human element will remain prominent in the world of financial advice, the industry will continue its technological advancement.”
GlobalData’s finding follows the closure of yet another solely robo-advice firm in America, Hedgeable, which proceeded three similar firms already calling it quits.
Recommended for you
AZ NGA’s CEO has unpacked how its recent $345 million debt facility from Barings will accelerate its advice network’s growth ambitions, and allow its largest firms to access a greater source of funding.
Research by Colonial First State has found women are reluctant to make retirement preparations, despite 62 per cent saying they feel that they are unable to achieve a comfortable retirement.
Managed accounts saw net inflows of $14.3 billion in the six months to 31 December, according to the latest IMAP FUM census.
The increased bids for Insignia from Bain and CC Capital value the company at $3.3 billion, while there is still a possibility for competing bids from rival players such as Brookfield.