For some, receiving financial advice when investing money is crucial.
Designed to deliver universal access to good financial advice, RDR had the polar opposite effect, leaving millions in an ‘advice gap’.
Big business in the States, automated, or robo-advice, is set to boom in the UK with a number of recent launches and many more in development.
The FCA is to encourage ‘online automated advice models that have the ability to deliver advice in a more cost-efficient way’ and thereby revolutionise mass market savings and investment.
Online advice can be quicker, cheaper and accessible; those less confident about DIY investing may eschew traditional advice for a platform that delivers a ready-made investment portfolio.
Quick – robo-advice platforms are designed to make investing as easy as possible; automated advice platforms are based on efficiency, aiming to deliver high quality financial advice in the least time possible.
Simple – robo-advice platforms make maximum use of technology to make things as simple as possible. Online technology is the enabler for the new raft of investment platforms with everything available via a laptop or smart phone.
Transparent – cost is an important factor in the successful outcome of any investment strategy; robo-advice platforms tend to have simple and transparent fee structures.
Traditional advisers may provide a more bespoke service, with complex pricing; a robo-adviser aims to provide a straight forward service with a straight forward cost.
Accessible – robo-advisers have no high minimum investment requirements; a low cost, online business model means lower minimum investment amounts for clients, providing access to the many millions precluded from financial advice.
Engaging – robo-advice web sites are attractive, simple and engaging; an online account with an up to date valuation of your portfolio is always available.
Human – in contrast to the ‘robo’ moniker, most providers will have advisers on hand to speak to clients directly when required to deliver reassurance or guidance.
Human interaction can be by telephone or webchat so the client experience is unlikely to be purely online; platforms provide as much or as little direct contact as is required because even robo-advised investors are individuals.