Barrett says: “If by robo-advice we mean combining human, regulated advice, with digital services – client portal, simple onboarding – then yes, this feels like the best of both worlds, and increasingly aligned with client expectations.
“The challenge for the sector will be to implement services that offer a good customer experience, but also retaining the human – and in some cases face-to-face – element that advised clients will typically value.”
He adds that for a lot of these services “the genie is out of the bottle”.
“Short-term fixes implemented to allow firms to operate during restrictions will evolve to become more permanent solutions. I don’t think there will be a return to a completely offline world.”
Ian Lowes, managing director at Lowes Financial Management, agrees that the robo-advice takeover is not prevalent, but many businesses are working on a hybrid model due to the investor preference of speaking with human beings.
Lowes says: “As far back as the Financial Conduct Authority’s Financial Advice Market Review in 2016, the regulator identified that robo-advice had a key role to play within the UK financial advice market; the thought being that automated processes could reduce the cost of advice and develop new ways to engage with consumers and maybe bridge the advice gap.
“In reality, the take-up was not what was anticipated as further research found that there was a lack of confidence from investors who preferred to speak to a human being, particularly during the initial stages of the advice process.
“Roll forward to the global pandemic of 2020 and the wealth tech sector has seen something of a revival as the restrictions forced even the most traditional of clients to adopt a more digital approach.”
He adds that there is “without doubt a place for robo-advice", but says the “evolution is more likely to be a hybrid approach using digital channels, automated processes and the good old human financial adviser”.
Kat Mann, savings and investment specialist at Nutmeg, agrees that the solution is adoption of hybrid models as opposed to a fully automated one.
“We see the future as being hybrid – people and technology.
“For financial advice and planning, there’s often been a resistance to digital services in this area, with traditional face-to-face meetings with clients held up as the gold standard.
“The world has moved on and being able to provide wealth management and advice on clients’ terms is our focus. The pandemic has shifted the perception of what can be achieved via video calls, digital interactions and how this can be used to deliver a personal service.”
Simon Gray, managing director at Hub Financial Solutions, says robo-advice and in-person advice complement one another.
