Robo-advice not holistic
Many current robo-advice models fail to consider the investments investor already have, both outside and within superannuation, which could lead to poor outcomes for investors, InvestSmart said.
The online financial services portal argued robo-advice as it stands directs investors to risk-profile ‘matched' portfolios, without a holistic approach.
Chief executive, Ron Hodge, said many online investment management tools expect investors to go along with robo-advice outcomes without educating them.
"Excessive focus on the end product and lack of a broader educational component are all issues that can limit the value of robo-advice for self-directed investors — or at the very least mean it should be taken with a significant health warning," he said.
While robo-advice had the potential to deliver low-cost investment planning solutions for ordinary investors, technology in its current form had not yet been able to deliver.
Robo-advice should be a holistic investment tool that educates investors rather than selling investment products, Hodge said.
AUTHOR
Malavika Santhebennur
Recommended for you
For the 2025 financial year, all but one listed advice licensee has reported double-digit share price growth – but which licensee has seen the best performance and what activities have they enacted during the period?
Evidentia Group has confirmed its new executive leadership structure, having been formed from the merger between Evidentia and Lonsec Investment Solutions, to shape the future of managed accounts.
CC Capital, the last remaining player in the bid to acquire Insignia Financial, is still yet to finalise its offer, the firm has informed the market.
The top-performing investment platforms of 2025 have been revealed in the latest Money Management Advice Tech Review Survey by Agile Market Intelligence.
