But there are dangers.
If we consider that the digital assistants are little more than sophisticated calculators, then we have to consider the scary truth that a fat-fingered consumer could inadvertently input the wrong data and consequently be led to a wrong solution. That could be a costly mistake that people may not realise they have made until years later, when their expected financial futures turn out to be less attractive than they anticipated.
And if they have relied on the guidance of a digital assistant they really will not have any recourse, will they? You bet they will. They will come after the company that set up the robo-advice. For that reason, its limitations must be made clear.
One thing that has become apparent in the past couple of years is that there is a degree of consumer resistance to robo-advisers.
Last May, for instance, Investec shut down its Click and Invest robo-advice business because appetite for the service had remained low and the market itself was “growing at a much slower rate than expected”.
The truth, as I see it, is that robo-advice will become a crucial part of the financial advice offering, but only over time, and only as an adjunct to traditional human interaction with clients.
By the end of this decade we will laugh at the naysayers who have been busy predicting the death of robo-advice. I get where they are coming from, because as far as I can tell, robo-advice has been seen in some quarters as a way to cut costs or simply to encourage people to invest more money.
Neither is true, but the technology will prove a boon to those companies that use it properly. That means harnessing it to add to the service they offer rather than reduce it.
I reckon it will turn out to be a crucial extra string to a financial adviser’s bow, and will be used to back up advice given, rather than replacing it.
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Simon Read is a freelance journalist
