Advisers reluctantly embracing robo-advice
By Tom Carnegie, 1 Nov 17
Robo-advice trust, Brexit certainty and profession growth were all major topics covered in Prudential’s latest report on the key issues facing financial advisers in 2017.
The second annual Adviser Barometer report by Prudential was released on 1 November and identifies changes across key areas for financial advisers, including what is driving new business and recruitment and training in the industry.
March of the machines
Key findings of this year’s report include its research on the contentious subject of robo-advice.
One key finding was that there is growing acceptance that robo-advice solutions can help close the advice gap.
In 2016 only 17% of advisers agreed that robo-advice was a potential solution to helping more customers fulfil their financial needs. This view has now changed entirely, with the 2017 report showing 69% of advisers thinking robo-advice can fulfil this role.
However, the research also found that just over two-fifths (41%) were planning to launch robo solutions for clients, while almost the same amount (44%) say they will stay clear.
Further, 40% believed robo-advisers were a threat to their business, two thirds (67%) are worried robo-advice could bring regulatory or compliance issues and more than half (54%) saw it as an option only for clients with small funds.
Paul Harrison, head of Prudential’s business consultancy for advisers, says there is growing acceptance that robo-advice has a role to play but advisers have real concerns about the potential regulatory impact it will have.
“Many advisers remain sceptical about the risks and rewards of robo-advice, although improved technology can bring greater efficiency, reduce costs and help advisers to serve clients better while continuing to run viable businesses,” Harrison says.