It seems that far from thinking of robo-advice as a one-dimensional ‘threat’, increasing numbers of financial planners worldwide are starting to regard robo-technology as complementary to their businesses. This is according to the results of recent research by the Financial Planning Standards Board (FPSB).
FPSB, is a nonprofit association promoting global professional standards in financial planning and emphasises the benefit and importance financial planning has for the general public. The FPSB have released a report called Fintech and the Future of Financial Planning. The report includes publication of over 1,700 survey responses from Certified Financial Planning professionals worldwide.
Noel Maye, FPSB chief executive, says the research reveals that over recent months, financial planners’ attitudes towards robo-advice have shifted.
In 2015, many professionals saw automated tools as both a threat and an opportunity in almost equal quantums. However, it now appears that planners are more welcoming of robo-technology in the financial planning process.
This is positive feedback, but it will inevitably be some time before the majority of planners feel fully comfortable with the onset of automation. Robo-advice drives down business costs and this will encroach on the income advisers receive from fund-related sources. There is no covering up that certain roles within wealth management are under threat.
Whichever way we look at it, robo-advice is an inevitability. After all, automated advice solutions are the natural domain of our future clients - the Millennials – who are characterised by their multi-tech tasking and their preference for online, not inter-personal, commercial transactions. Taking the time to sit down face-to face with an adviser is unlikely to appeal if there is an online alterative.
Without a doubt, it follows that early, positive engagement between human and machine is healthy. However, we will have to stay ahead of the game if clients are fully to appreciate the value of the human financial planner.
As the CEO of the Financial Planning Standards Board warns, “as fintech tools grow, planners will need to clearly differentiate the value they provide over fully automated advice tools”.
The FPSB will use the results of its research to help guide the planning community as to how it should engage with robo-technology. While we look forward to hearing more from FPSB about this, we must be sure to embrace technology for the good of our clients and leave our clients with a clear sense of our “human” value.