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20th July 2018
Financial Planning

Advisers need to fight back against robo adviser threat

Originally the mission of robo was to provide an online ‘IFA free’ investment management solution – one that plugged the RDR advice gap. However, in recent months, there has been a concerning shift in the robo world that could result in a full-frontal assault on the traditional IFA community – ‘bionic’ robo.

Notable players including Scalable Capital, Nutmeg and Wealthify have all recently introduced or are considering human advisers to complement their algorithms.

Media reports suggest they are now willing to offer advice as a loss-leader in order to attract more assets under management. A January 2018 Scalable Capital press release said, and I quote: “After the initial, free consultation which determines whether the firm’s services might be suitable for the investor, the client can go ahead and book a session with an adviser for a fixed fee of £200.” The original robo target market was thought to encapsulate small to medium sized investors who had just begun to build a nest egg and needed to put it into the market at a competitive AMC. Investors with larger sums were deemed IFA clients.

But bionic robo is now coming directly for the IFA heartland and IFAs need to fight back with digital services of their own if they are to survive the onslaught.

Link to original article