Royal London may choose to detune some of the more sophisticated capabilities which can automate full regulated advice, so that they only offer guidance to members and signpost them to regulated advice when they really need it, or they may choose to deploy these in a white label format via regulated financial advisers. Both strategies could sit well side-by-side.
It is a simple economic reality that most of the UK population cannot afford to pay for traditional highly regulated advice when it is all carried out by highly qualified humans. The answer must be to deploy advice automation to help make this process economic.
The advisers may find the idea of buying this sort of technology from an insurer as somewhat alien and I have reservations over the independence of the solution.
This will need to be addressed. An obvious way and one which would make this proposition truly compelling, would be an open finance aggregation capability to make it much easier to bring together the value of a client’s other retirement savings as part of the process.
Although numbers have not been disclosed for either transaction, Royal London has arguably acquired and even scarcer resource then Transact.
While accumulation robo-advisers abound the really tough challenge is delivering genuine automated decumulation advice.
The only alternative system that has been fully demonstrated to me to be able to match or exceed Wealth Wizards capabilities is Destination Retirement from Hub Financial Solutions, so the mutual insurer has bagged itself a rare diamond whatever the cost.
The above deals show a major trend in the evolution of the adviser tech market. Increasingly financial institutions will become the owners of advice tech firms allowing them to achieve scalable growth.
This will usher in an era where platforms and insurers provide chargeable technology services to advisers.
Indirect benefit rules mean these cannot be free, but they can be fair.
This should be seen as a positive development that is facilitating deeper collaboration which will bring real customer benefits.
Ian McKenna is the founder of Financial Technology Research Centre and AdviserSoftware.com
