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
TAL has introduced four new courses to its Risk Academy focused on ethical dilemmas as part of Ethics Month to help advisers meet their CPD requirements.
Unadvised Australians believe they need $2 million to retire comfortably, according to Colonial First State, a wide variance compared to advised individuals which estimate $1.3 million.
Financial advisers can now access Vanguard’s diversified managed account strategies on HUB24 and Netwealth, marking a “significant expansion” through new distribution channels.
The heads of two financial advice licensees have joined the board of the Financial Services Council as it looks to deepen its engagement with the space and strengthen its representation.
