Robo – it’s just investments, or is it?

By AdviceBridge

In the wealth management world, robo-advisers are growing in scale and popularity.

Robo-advisors typically help with investment advice rather than financial advice and are designed to optimise performance without the need for human intervention. The automated investment solutions manage portfolios using algorithms and artificial intelligence.

So far, they have proven capable of being able to capture the next generation of investors who already rely on apps to manage almost every aspect of their lives, including their money. However, it’s not just the new investors that are looking to engage more digitally.

Robo – investment or advice?

Since launching more than 10 years ago, robo-advisors managed $460 billion, by 2020.

This represents a whopping 30% increase from 2019.

And CNBC reports that analysts predict, by 2024, robo-advice services could become a $1.2 trillion industry.

Naturally, this phenomenal growth, which the pandemic has only helped accelerate, has caused speculation and concern about the role of human advisers.

Traditionally, financial advice was a distinctly human, face-to-face service. Now, with the rise of robo-advisers, discussions about how human advice and robo-advice will battle things out have been popping up with increasing frequency.

Robo – financial planning, not just investment

The argument as to who can win the loyalty and wealth of future populations is far from binary. More likely, technology solutions will evolve to enhance human financial advice, rather than replace it wholesale.

Because hybrid models use a combination of human and digital capabilities, and effectively complement and support one another, they can be best used to enhance the client experience.

This makes it more likely that hybrid solutions are the more common model. And will probably be used by advice firms and advisers to optimise the quality and efficiency of the service they offer.

Research from Accenture backs this thinking up and proves there is strong demand for hybrid advice models from consumers: 68% of emerging wealthy and high net worth investors prefer hybrid models to a traditional advice model.

Are advisors holding back their existing clients from this increasing appetite for hybrid services?

Tech solutions are crucial, especially if you wish to cater to Gen X and Millennials who are expecting to receive a wealth transfer of $68 trillion in the coming decades.

However, although robo-advisers are appealing when compared with more costly human relationships, they can rarely stand alone.

Firstly, the advice journey is a very complex area to try and automate, hence robo-advisers are more robo-investors.

Secondly, software development and algorithm creation are costly, and this results in it being difficult for businesses to drive profit from pure tech solutions.

Plus, there’s no escaping the value of having a human to instil confidence and trust when you are making difficult, often complicated, decisions about what to do with your money.

Technology will enrich financial advice and enhance processes

Rather than taking over the world and replacing traditional financial advice, new technology will more likely enrich the way you work and enhance your processes.

The global pandemic has accelerated many advisers into adopting new technology to serve clients. Unable to meet face-to-face, embracing video conferencing through Zoom, Microsoft Teams, or Google Meet has been essential.

This previously unthinkable move has caused many traditional advisers to acknowledge the benefits of other potential digital changes they could make to enhance their service offering and benefit their clients.

Further, more and more clients have much greater expectations when it comes to receiving services digitally.

How AdviceBridge could be the hybrid solution you need

AdviceBridge has developed an automated financial planning solution specifically aimed at meeting advisers’ needs in engaging clients across the generations.

The intelligent software uses automation to help you personalise advice in an efficient and cost-effective way, cutting huge amounts of manual time and costs.

For your clients, the illustrative interface creates greater touchpoints and helps increase familiarity and greater trust. The goals-based tools enable your clients to see how altering their finances will affect them now and in retirement.

Clients can access information 24/7 and you can see any updates or changes in their financial situation. This means you can deliver timely, on point advice with minimal effort.

If you want your business to continue to thrive, the sooner you adopt the right technology, the sooner you can enhance your value proposition and deliver distinctive customer experiences.

Get in touch

If you want to find out how AdviceBridge can benefit your business and your clients, please get in touch. Email hello@advicebridge.com or call us on 020 3925 3850.