Octopus Investments has released new research showing that the majority of financial advisers believe the future of financial advice will be a hybrid of established face-to-face service combined with elements of smart technology.
The UK-based investment firm conducted a survey into the opinions of advisers on the future landscape of the financial advice market, looking specifically at their attitudes to the increasing use of technology within the sector such as robo-advice.
Robo-advisors are a class of digital adviser that utilises mathematical rules and algorithms for its clients with minimal human intervention, and have become a key discussion point in the sector, acting as a kind of bellwether for the growing utilisation of smart technology in the market.
Octopus Investments’ findings showed that 76 percent of advisers thought that a financial advice model that combined conventional meetings with technology would be the most likely future method of meeting client expectations. An even greater proportion, 81 percent, also believed that the next generation of financial advisers would have to factor robo-advice specifically into their offering.
The results also showed that three quarters of the surveyed advisers believed financial advice online will become a crucial method for younger clients seeking financial advice in the future. Furthermore, 27 percent of advisers surveyed have said that they are already incorporating some form of online advice into their business, with an additional 57 percent actively considering it.
Octopus Investments’ results have been released the same week as a study from technology solutions firm Linedata, which suggested a contrary lack of enthusiasm for the subject matter among investment managers, as their findings showed there was an increasing lack of interest in robo-advisers among asset managers and investors.
Nevertheless, although Linedata’s research may have suggested the issue was no longer a key topic of discussion, they did not suggest there was a negative attitude to such technology, a point made also in Octopus Investment’s study with only 13 percent believing that robo-advice will distract clients from the core face-to-face advice proposition, and less than one in ten suggesting that the risk profiling it offers is too imprecise to be credible.
Ruth Handcock, CEO of Octopus Investments, believed that a human touch would remain highly useful to clients seeking financial advice but that smart technology could enhance their offering.
She said: “Technology will play an increasingly important role in the future of financial advice, and there are some obvious benefits for the industry. Yet for most people, a smart online interface with some risk profiling is not going to replace the value of a financial adviser. Our financial lives are deeply interwoven with our personal, professional, and family lives, which are rarely straightforward. When making big life changing decisions, we need someone who is able to listen, build trust, and empathise with our goals. Advisers know this better than anyone. The real opportunity lies in combining that human touch with smart technology.”
Jacqueline Lockie CFP Chartered FCSI, Head of Financial Planning, was certain that younger people would still want face-to-face interaction in their business dealings.
She said: “It’s clear that investor habits are changing, as the next generation of adviser clients comes through. Millennials have different communication preferences with a tendency to rely more on technology and information online. However, research has found that young people are still big fans of human interaction and relationship-building, which is key to developing trust. This is why a hybrid model, where face to face advice - underpinned by smart technology, will be key in the future.”
